Demand Response: The journey so far

Demand-side management: since 1950

New Zealand has a long history in demand-side management – balancing the supply of electricity with the demand by adjusting or controlling the demand. This dates back to the 1950s when hot water ripple control was introduced – you might not be aware of it, but electricity distribution companies can temporarily turn off your hot water heating in order to reduce electricity demand across their networks when demand is high. This system remains widely used and is an important network management tool.


Early trials: 2007-2010

Transpower’s involvement in demand response started in 2007. We carried out a trial in the upper South Island, proving demand response was a reliable option as a transmission alternative. However, at the time there were very few consumers with the technical ability to provide demand response into our programme, which resulted in high prices. This situation was confirmed when we sought 60 MW of demand response in the upper North Island in 2010.


A growing alternative: 2011-15

Our initiatives since that trial have focused on growing demand response as a power system resource by removing barriers for participation. In 2011, we purchased a Demand Response Management System (DRMS) to allow our programme to scale to a meaningful size. Previous initiatives were manually coordinated and created limits in the number of organisations that we were able to deal with. The DRMS effectively removed that barrier by automating many of the communication, verification and coordination functions required in an operational demand response environment.

The operational effectiveness of the DRMS was confirmed in 2013. When our programme commenced that year, interested participants registered 134 MW of demand response. By the end of that year’s programme, more than 200 MW was delivered in our largest demand response so far. That event was in the Auckland region and represented approximately 16% of peak demand in the region. While the 2013 programme was considered a success, it highlighted areas for future development.


Proving future capability: 2015-20

From 2015, our five-year programme targets geographic regions where we think demand is likely to be constrained in the future. Our programme aims to establish a proven capability in time to meet the needs of the power system.

We’ve also focused on developing our understanding of how the programme can work for campus-based organisations (like hospitals and universities) which commonly have backup generation installed already. Currently we have several hospitals and a university registered to participate.

Other key energy consumers in our investigation have included the agribusiness industry (in particular, irrigation and dairying operations) and the early-adopter group who are actively using batteries to store generated energy.

Our current programme extends until June 2020, with contracts being awarded for periods within each financial year with options for extension.


Using demand response on the National Grid

On occasion, demand response has been utilised by our operations team to provide additional resource to the grid during planned, maintenance outages. This has proved to be a cost-effective mechanism to reduce the impact of required maintenance on electricity users on a regional basis.

One example occurred during a planned outage on the Tekapo A line in 2014. At short notice, the demand response programme delivered the cover required to manage the power system during a period of high electricity demand in the south Canterbury region.