Camel Chiropractics: The New South Wales Demand Management Code And Mapping Demand Management Opportunities

Chris Dunstan, Sustainable Energy Development Authority of New South Wales

Keywords

Abstract

Electricity utility-based demand management (DM) has traditionally been based on “least cost planning” and/or dedicated funds. In both cases, the assessment and selection of DM options has been centralised in the hands of the utilities themselves, their regulators or the fund administrators. Market participants and other stakeholders have been dependent on these bodies to decide and disclose when and where DM opportunities arise and what they are worth.

The New South Wales (NSW) Government is supporting an alternative, market-based approach to DM through the NSW Demand Management Code of Practice (DM Code) which requires the monopoly distribution network businesses annually to disclose detailed data about capacity, load and investment proposals throughout their service territory. The DM Code also requires the network businesses to adopt a transparent, competitive process for assessing and procuring network and non-network (DM) solutions to emerging network constraints.

These data, published in annual “Electricity System Development Reviews”, can be summarised to produce highly informative network constraint and DM opportunity maps. These maps allow DM services providers and other interested parties to identify, at a glance, areas of emerging constraint, the relative marginal cost of network capacity and therefore the potential for, and value of, DM in different areas. Such maps can be invaluable to network businesses for planning and to regulators for reviewing network investment prudence.

This paper reviews the development and performance of the DM Code, presents DM opportunity maps for metropolitan Sydney and suggests options to improve the DM Code.