Pricing tool to ease costs for major energy users
The Albanese Government is acting to lower energy prices and ease pressure on the grid, with a new tool for major energy users to better time the energy consumption with peak renewable generation.
The $864,000 investment from the Australian Renewable Energy Agency (ARENA), will let AGL Energy trial a ‘price intensity’ tool to help four Melbourne-based commercial and industrial energy users better match supply and demand.
The two-year trial will help big energy users maximise storage or shift electrical loads to times of high generation, when energy is cheap and renewable.
The $1.78 million project will provide Melbourne Airport, a major supermarket chain, a warehouse and logistics company, and a water utility company with 30-minute pricing updates based on solar and wind generation forecasts and thermal generator availability over a 7-day period.
The price signals will help the organisations better plan their energy use, ratcheting it up when prices are low due to abundant renewable energy and down when prices are high.
By responding to the price signals, the four customers could cut their energy costs and free up about 25 MW of ‘flexible load’ capacity during the trial, which will deliver broader benefits to the electricity system.
Assistant Minister for Climate Change and Energy Jenny McAllister said the innovation could have widespread benefits for major energy users.
“The Albanese Government is investing in technology that will allow energy users to lower energy costs, by drawing on the grid when renewables are at their most abundant.
“Tools like this can provide big energy users the price signals they need to optimise the use of their energy, an important step as we become a renewable energy superpower,” Senator McAllister said.
“Small changes to energy usage by individual companies can make big differences by easing pressure on the grid, increasing the availability of renewable energy and putting downward pressure on energy prices.”
AGL will start developing software and hardware early next year for its Dynamic Pricing Load Flex Project and will share findings from late 2024 with the final report due in mid-2025.
The trial customers represent sectors with flexible load capacity of around 385 MW across the National Energy Market.