The South Australian (SA) Government is currently consulting on local demand response requirements for selected appliances and proposed amendments to local energy requirements for water heaters.

The SA Government is considering early implementation in SA of demand response (DR) capability requirements that were agreed nationally by Energy Ministers (Energy Ministers’ Decision). Accelerated implementation is intended to address the emerging challenge of minimum net demand in SA by requiring more controllable devices in the system.

While we understand the nature of the emerging challenges associated with DER customer connections and the risks associated with minimum net demand in SA, we believe the immediate system security concerns can be effectively managed through the SA Government’s Remote Disconnect and Reconnection of electricity generating plants technical standard that came into effect on 28 September 2020.

The SA Government’s focus should be on aligning the regulatory framework with the broader transition of the NEM towards a two-side market through the development of fit-for-purpose and nationally harmonised rules and technical standards to facilitate the growth of demand response. This is so that consumers as owners of DER assets can not only improve the affordability of their energy use through lowering their energy reliance on centrally supplied energy, but also be rewarded for offering up their DER assets for wider network and wholesale market-based services.

To realise the full value of DR to consumers and Australia’s broader energy system whilst mitigating cost to consumers, the SA Government’s policy approach should consider:

  • The practical issues associated with the application of the Demand Response Enabling Device (DRED) control methodology specified in AS4755;
  • The ongoing work of the EL-54 Standards Australia Committee that is intended to create an enhanced DR standards framework that would increase flexibility, reduce cost and improve customers’ experience in the delivery of DR services;
  • The desirability of competitive-based mechanisms to incentivise and empower consumers to actively participate and support the wider electricity system reliability over technical standard approaches that risk increasing the payback period for DER asset investment; and
  • The suitability of a product-based technical standard solution (as specified in AS4755) versus a nationally harmonised technical communications protocol that could better serve the needs of the market by facilitating a mass market response to support system reliability.

AGL recommends the SA Government:

  1. Support the development of a nationally harmonised technical communications protocol as a higher priority policy objective to the accelerated implementation of the Energy Ministers’ Decision.
  2. In considering the accelerated implementation of the EV charger standard requirement in the Energy Ministers’ Decision, establish a technical committee that reports to the SA Office of the Technical Regulator comprised of industry representatives to determine an appropriate timeframe to develop a technical standards framework and execute that program through appropriate industry consultation.

We elaborate our views in our formal submission, a copy of which is available here.