Find out the answers to the most common questions about demand response.
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Why is Transpower investigating demand response?
Demand Response is a smart, strategic solution that is helping to deliver a resilient, cost effective transmission service. Innovative technologies and smart solutions that don’t involve building new assets are critical for us as we work to predict and meet the changing demands of New Zealand’s electricity consumers.
What are the requirements for participating?
We are looking for participants who are interested in being at the cutting edge of energy management - finding smarter ways to use and pay for power.
Ideally, you'll use 20 kW or more of peak demand, and you'll need a time of use meter.
What are the restrictions for this programme?
There are no limits to the number of sites or the MW capacity we are looking for. All proposals will be evaluated against set criteria.
How hard is it to set up?
The main effort will be ensuring that your back-up or alternative energy supply is working efficiently, or that you're easily able to reduce your supply when needed. We'll provide a step-by-step guide to getting started once you are contracted.
Will I face any set-up costs to participate in the programme?
We will need to assess whether your systems are suitable for the programme but it is your decision whether you choose to pay for an energy audit and any improvements needed to your energy systems.
The response to the Request for Proposal to participate in the programme includes the opportunity to claim a one-off establishment payment from Transpower, which would be a partial contribution to the costs you incur in setting up your systems for participation – called the Establishment Fee. You can include this cost in your application to take part in the programme.
How do I calculate how much energy I can provide?
To help you estimate how much demand response you can provide it is recommended you obtain one year of historic meter data. This will provide information about your historic peak demand as well as the general daily demand profile. An energy audit may also be useful.
What if I have any questions or problems during the programme?
Can I join the programme next year?
We anticipate that the DR programme will run through to 2020.
We can’t guarantee when we will open RFP registration cycles, but we expect to announce additional cycles as our needs increase.
Do I have to reapply for the programme?
If you have participated in past programmes (that is, before September 2015) you are welcome to apply to be in this programme. Your previous participation does not mean you are automatically part of this programme.
Only those who submit responses through the Request For Proposal process will be evaluated and potentially offered contracts.
We plan to install batteries soon - should we apply now?
How much will Transpower pay my business to participate?
That will depend on your individual agreement with Transpower. For each demand response event you will have the opportunity to set your own price point via a 'reverse auction', based on your estimate of how much you want to be paid to cover your time, the costs of running your standby generator and to make it worth your while to take part.
So I can just name my price and get paid for every event?
You will only be paid for events you take part in. One of the aims of the programme is to establish suitable price points for demand response. Individuals set the price they require to cover their time and costs, but when an event is called we will calculate how much demand response we need and engage sufficient participants to meet that need in the most economical way. Those with lower price points will be given priority – so those with higher price points are likely to take part in fewer events.
Do I need to invoice for payments?
No, the payment system is very straightforward. You will provide us with payment details as part of your contract. Following an event, you load your electricity meter data into our system and we calculate your payments and make the payment into your account.
How does the fee structure work?
There are two types of fee, outlined in our Guide to completing the Request For Proposal [ pdf 446.75 KB ].
In previous programmes, there were three types of fee. Availability Fees are no longer offered in our Demand Response Programme.
How do I respond when there is a demand response event?
When we need demand response on part of the grid, we will offer a price (at least three hours in advance) to participants. If the price is right for you, then you can accept it (or offer a lower price) and tell us the level of demand response you'll provide.
If you are selected for the event, you are advised of that at least two and a half hours before the event. After the event we measure your demand response and pay the agreed price for the amount of demand response delivered.
When you register for the programme you tell us your Indicative Strike Fee – that's the price point that you're likely to participate at when we call DR Events. If we call an event at or above your Indicative Strike Fee there is an expectation that you will participate in the event.
How many events will be called during the programme?
It is hard to estimate the number of demand response events but approximately 20 events are called over a six-month period.
Will events be called overnight or at weekends?
The nature of the businesses we are targeting means that events will mainly be during office hours, Monday to Friday. You are also able to stipulate the hours you are able to participate into your individual contract.
How long do events generally last?
Anything from 30 minutes to a maximum of four hours. Generally, events have lasted between one and two hours.
What will I be required to do during an event?
You will be given at least two and a half hours' notice that the event is about to start. When it starts, you will need to switch your electricity supply over from mains power supply to your alternative energy at the start of the event, and back at the end - or, alternatively, reduce energy use at the start and not ramp up until the event finishes. Whether this is done automatically or manually depends on your individual processes.
Will it cause any disruption for tenants/building users/customers?
Switching between grid supply and your standby generator is intended to be seamless with most building occupants or customers in a store not even being aware of what is going on. However, this does depend on your individual processes. Undertaking an energy management audit before you begin the programme will help you better understand your capability.
What if my alternative energy source fails?
If you're using an alternative energy source and it fails, you can simply switch straight back to mains power.
One of the major benefits people with standby generators have found is that, in preparing for the programme, they are sure their standby generators are in good working order.
What happens if I can't always deliver the agreed amount of energy?
You will be paid at the agreed price for each event, but just for the amount you have delivered.
If you are consistently unable to deliver the agreed amount, we can look at changing your registration (including any Establishment Fee component) to a lower capacity.
How much demand response is Transpower looking for?
We are building our demand response capability in areas where we have identified a likely future need. Our targets and expectations vary across different locations and consumer types, and change over time.
Do Transpower check that the power factor is right?
Although power factor may be an issue in some places, the primary focus for the demand response programme is peak demand.