NSW unveils ‘world first’ scheme to shift electricity demand, expects saving of $1.2 billion by 2040

The New South Wales (NSW) government today announced what is essentially a demand side management scheme to shift electricity consumption periods. The Peak Demand Reduction Scheme, as it’s named, will provide NSW households and businesses with discounts to install technologies like smart pool pumps or household batteries which can shift when electricity is used, with the government claiming the scheme to be a “world-first”.

“If all the backyard pool pumps and filters across NSW were used outside of peak periods, we could save up to 450 MW – that’s more than the capacity of a generating unit at the Liddell Power Station,” NSW Energy Minister Matt Kean said in a statement.

The scheme is set to kick into action in time for the 2022-23 summer, with the NSW government saying it has additionally invested $25 million “to support the development of emerging technologies and software that allow households and businesses to use power when it is cheap and abundant.”

Why managing demand is key to decarbonising

Due to the massive penetrations of rooftop solar in Australia, many regions’ grids now experience what’s known as a duck curve – when too much renewable energy is generated during daylight hours, only for production to cease before evening demand peaks.

This misalignment of demand and supply means that much solar electricity is currently wasted. As software develops, however, it’s possible to program appliances, and even homes and businesses to consume power for non-time sensitive activities (like pumping a backyard pool or charging batteries) so as to soak up excess renewable electricity during the hours it’s abundant (and therefore cheap) rather than when the sun goes down and everyone starts switching on their ovens for dinner. 

Household batteries are the most obvious way to ‘solar shift’ but increasingly energy management platforms and smart appliances are proving helpful. In May, minister Kean also launched electricity distributor Endeavour Energy and smart metering company Intellihub’s Off Peak Plus program on the state’s south coast. It involved 2,500 homes across Albion Park, being installed with smart meters to dynamically control homes’ hot water systems, meaning they can be switched on during the day when there is cheap surplus energy in the grid.

“There are so many easy ways to reduce our peak consumption without impacting our way of life,” Minister Kean said.

Fuel switching activities covered

The government also said “fuel switching activities” will be added to its existing Energy Savings Scheme. “This will include incentives for households to switch to solar and heat-pump hot water systems, and for businesses to replace gas, diesel or grid supplied electricity with renewable energy technologies like a biogas boiler,” it said.

“By reducing peak demand we can supply power to everyone who needs it, when they need it, at a lower cost,” Kean said.