Taking demand management into the future: Managing flexible loads on the electricity network using smart appliances and controlled loads

Unprecedented changes have occurred over the last five years in the way customers use electricity. These changes are driving electricity distributors to evolve and extend their demand management capabilities to include grid balancing, respond to localised demand and promote and activate smart appliances. In South East Queensland, Australia, two successful forward looking demand management programs are well established. More than 50,000 demand response ready air conditioners have been connected to the network and are able to be controlled by the distributor. Results show that demand reductions from these air conditioners are reliable and sustained for the period of demand events. A second program uses controlled load electric hot water systems as a 'solar sponge' to integrate renewables into the network. This article highlights the potential demand management benefits of using hot water systems to reduce the localised peaks and fill the midday demand trough. The results from both programs show the capability of these demand management tools to improve network utilisation and grid balancing and reduce overall network expenditure. A further demand management initiative identified as having the greatest likelihood of success in delivering benefits to both the utility and customer are tariff structures which incorporate cost reflective pricing. In this way, time of use and magnitude of demand are addressed and positive price signals encouraging load control of appliances are provided. This coupling of demand management and tariffs is shown to be highly effective in achieving demand reductions. Automated load control can support customers' acceptance of new pricing approaches and provide a 'set and forget' solution for optimising the benefits of cost reflective tariffs. The challenge for distributors is how to transition the existing demand management incentives and tariffs to a sustainable future program in an increasingly disaggregated and competitive market.