Catalysing a low-regret transition: unlocking flexible demand in the commercial and industrial sector

Panel: 2. Policy innovations to ensure, scale and sustain action

This is a peer-reviewed paper.

Authors:
Dani Alexander, RACE for 2030 CRC, Australia
Thomas Brinsmead, CSIRO
Charles Bransden, RMIT

Abstract

Increasing flexible demand in the commercial and industrial sector should be a win-win-win (Renewable Energy and Load Management for Industry Report, 2017): businesses pay less for their electricity onsite, benefiting the market; network businesses need to invest less, reducing costs for all customers; and more variable renewables can be hosted on the grid.

Despite these benefits, it is widely accepted that the demand-side resource is underutilised. In Australia, even a narrow definition of demand response (load shedding to address network instability) offers close to 10% of total system demand (~3GW), however only half of this is currently committed to programs (unpublished research, 2020). Thus, the problem is twofold: tapping into the existing underutilised sources of demand response; as well as widening the definition of flexible demand to unlock greater energy, cost and decarbonisation benefits for customers.

This paper provides a roadmap to unlock the achievable value of flexible demand through targeted research. The most prospective flexible demand opportunities are identified via a priority “HUF” (homogeneity, ubiquity, feasibility) matrix of technologies and sectors (Solar Optimisation Upgrades in the Victorian Commercial and Industrial Sector, 2019). Options for better pricing design and policy incentives are proposed to unlock the demand-side resource of the priority targets. Focus is given to segments of the demand-side value stack that are not currently accessible to most customers, including the value of unserved energy.

The findings of this research will be directly leveraged to progressively fund research through the newly established $350 million 10-year Australian co-operative research centre – Reliable Affordable and Clean Energy for 2030 CRC. The research framework is provided in this paper to benefit other similar energy R&D organisations seeking to prioritise research efforts towards greater demand-side flexibility.

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