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Demand Management Plan April 2020

2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Page 1: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

Demand Management PlanApril 2020

Page 2: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

2

Demand Management Plan 2020-21

ContentsEGM message 3

Introduction 4

About us 5

Demand management 6

What is it? 6

Customers participating in our DM program 7

Challenges and opportunities shaping our strategies and plan 8

Customer value 8

Demand outlook 8

Renewables 8

Climate change 8

Fringe of grid 8

Electrification of transport 9

Customer expectations 9

Regulation and policies 9

Case study – Electric Vehicles (EVs): Discovering customer charging and energy use 10

Our strategy and plan 11

Overview 11

Our principles 11

Our strategies and initiatives 12

Our program 13

Case study – Market delivered Demand Response (DR) 14

DM program budget and targets for 2020-21 15

COVID-19 impacts 15

Energex forecast expenditure and targets 15

Ergon Energy forecast expenditure and targets 15

Page 3: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

Message from our Executive

Across the globe, a renewable energy revolution is unfolding. This is an exciting time that presents both challenges and opportunities. During this time, networks must remain focussed on safety; affordability; enabling connection and optimisation of distributed energy resources (DER); maintaining security and reliability and most importantly, understanding and delivering what our customers value.

Demand Management (DM) will continue to be important, particularly as the amount of variable generation, transport electrification and climate variability increases. DM will also complement the roll-out, where cost effective, of alternative energy supply solutions to customers (for example, in Fringe of Grid areas).

The recent merger of Energex and Ergon Energy has strengthened our position as the largest DM program in Australia. With our depth of experience,

expertise and key partnerships, we are well placed to deliver best practice DM and to continue evolving our strategies and approach to adapt to a high penetration DER future.

Finally, I would like to thank all the customers, industry partners and DM providers already participating in our DM Program. We are only as strong as these partnerships. I look forward to working with our existing and new customers and partners during 2020/21 and beyond.

Peter Price

Head of Corporate Strategy,

Executive General Manager Strategy, Asset Safety and Performance

Page 4: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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IntroductionEach year Energex and Ergon Energy publish a Demand Management Plan (DM Plan) to engage and inform our customers, DM providers and industry partners on our planned DM Program for the next five years. It forms part of a suite of strategies to deliver safe, affordable, secure and sustainable energy solutions. Consistent with Energy Queensland’s purpose, the DM Plan outlines initiatives that:

• are customer centric – supporting customers in their energy choices

• are cost efficient – working with customers, DM providers and industry partners to deliver cost efficient initiatives to reduce peak demand and improve network utilisation

• improve safety, security and reliability – by coordinating network and customer resources to work together

• activate the market and transition – by paying for DM services where they provide value and responding to regulatory and market changes

• help achieve the Queensland renewable energy target – by enabling connection of distributed energy resources (DER) to the grid

• are fair and equitable – by unlocking the value of DM services for all, not just those with direct access to DER.

The DM plan meets Energex and Ergon Energy’s regulatory requirements under section 127C the Queensland Electricity Regulation, which requires an annual DM Plan to be submitted for each upcoming year.

Page 5: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford

ToogoolawahCaboolture

Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford

ToogoolawahCaboolture

Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

Bamaga

Lockhart River

Pormpuraaw

Aurukun

Kowanyama

Normanton

Cairns

Cooktown

Townsville

Mackay

Coen

Gununa, Mornington Is.

Burketown

Doomadgee

Camooweal

Boulia

Bedourie

Jundah

Windorah

Birdsville

Mapoon

Georgetown

Richmond

Charters Towers

Pinnacle

Moranbah

Rockhampton

Clermont

Middlemount

Emerald

Springsure BiloelaMonto Gin Gin

ChildersBiggenden

Mundubbera

Wandoan

Roma

Quilpie

Blackall

BarcaldineLongreach

Winton

KilkivanMurgonKingaroy

Toowoomba

MillmerranWarwick

Stanthorpe

Chinchilla

St GeorgeCunnamulla

Charleville

Tara Dalby

Moura

Theodore

Mareeba

Atherton

Ravenshoe

Mossman

Innisfail

Tully

Ingham

Home Hill

BowenProserpine

Sarina

Yeppoon

Blackwater Gladstone

Gayndah

Yarraman

Miriam Vale

Bundaberg

Hervey Bay

Mt Isa Cloncurry

Julia CreekHughenden

Palm Island

Napranum

Maryborough

Brisbane

TORRES STRAIT

Boigu Is.Dauan Is.

Darnley Is.Yorke Is.

Murray Is.

Coconut Is.Warraber Is.

Stephens Is.

Mabuiag Is.Yam Is.

Badu Is.

Wasaga, Horn Is.

Hammond Is.

Thursday Is.

Kubin, Moa Is.

Saibai Is.

Regional network - Ergon Energy Network

Isolated supply - Ergon Energy Network

Ergon Energy Retail

South East Network - Energex

5

Demand Management Plan 2020-21

Our network

Our service area

About usWe are proudly part of the Energy Queensland Group, a Queensland Government owned organisation, and together we strive to deliver on our vision to energise Queensland communities. As Energex and Ergon Energy, our role is to operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million km2 across Queensland. Ergon Energy supplies electricity to homes and businesses over a vast area covering around 97% of the State – from coastal and rural

centres to remote communities of outback Queensland and the Torres Strait. Energex’s network supplies electricity to homes and businesses in the South East region of the State. The South East Queensland region includes the major urban areas of Brisbane, Gold Coast, Sunshine Coast, Logan, Ipswich, Redlands and Moreton Bay.

7,247

3

1.7 million

220,000km

employees

network control centres

power poles

powerlines

2.3 million

34,500GWh

587,392

3,365MW

5,086MW 2,612MW

connected customers

electricity delivered a year

solar energy systems connected

renewables connected

South East Queensland peak demand

Regional Queensland peak demand

34stand-alone and grid-connected power stations

Page 6: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

What is it?

DEMAND MANAGEMENT

Demand Management (DM) is part of our suite of solutions for network management which may be used instead of or in conjunction with network expenditure, to ensure an optimised investment outcome. In the context of electricity networks, DM is the act of modifying demand and/or electricity consumption, for the purpose reducing or delaying network expenditure (i.e. removing or delaying a network constraint). This definition recognises that DM need not be specific to removing network constraints only at times of peak demand. Rather that network constraints also include retirement or replacement of an aging asset; redundancy support during equipment failure; minimum demand and associated issues with voltage, system frequency and power quality management; managing diverse power flows and system security issues. In

response to growing DER in the network, DM must evolve to include consideration of these customer assets to optimise end-to-end investment.

DM can also be particularly valuable when there is uncertainty in demand growth forecasts, as DM does not lock in long-term investment. In these situations, DM can provide considerable ‘option value’ and flexibility.

DM solutions are also known as non-network solutions as they provide an alternative to network solutions. In the Energex and Ergon Energy context, DM involves working with our customers and DM providers to modify demand and/or energy consumption as an alternative to capital expenditure. The more capital expenditure that can be deferred or avoided, the greater the savings to our customers. Furthermore, DM provides

customers with tools that enable them to manage their demand and consumption to reduce their electricity costs.

There are three major DM approaches as outlined in the table 1 and shown in figure 1.

These approaches are implemented by customers or DM providers in exchange for financial incentives via their electricity bill or directly from networks.

DM must be deployed to match the temporal (i.e. how often and what duration) and spatial (i.e. what level of the network and how many customers are affected) nature of the network constraint. As more DER is connected to our network, the temporal and spatial nature of network constraints will change. As such, our DM capability will need to adapt to suit these new and emerging network constraints.

DM Approach Description Type of DM

1 Peak shavingReducing demand at peak period (e.g. Using onsite generation)

Demand Response (DR)

2 Load shifting

Shifting demand to other times of the day when networks are less constrained (e.g. Load control tariffs). Load shifting can be used to manage peak demand and minimum demand.

3 Energy efficiencyUse less electricity to perform the same task.

Energy efficiency

Table 1: DM Approaches

Figure 1: Demand Management Approaches

Peak shaving

Load shifting

Energy efficieny

Typical residential customer load profile Load after demand management measure

Page 7: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

Customers participating in our DM programOur DM Program is only as strong as our partnerships with customers, industry partners and DM providers.

# As at 31 March 2020 and reported to AEMO

*Includes contracted demand response (non-network generation contracts)

Figure 2: Energex and Ergon Energy

Managing Demand in Queensland

Premises with controlled load

Premises with PeakSmart

Premises with reduced demand in Target Areas

Number of CustomersEnergex network

areaErgon Energy network area

Customers with load control tariff# 711,256 408,219

Customers with PeakSmart air conditioners# 74,579 4,341

Customers who have reduced demand in Target areas* 548 256

Page 8: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

Customer value Renewables Climate change

Fringe of grid

Demand outlook

CHALLENGES AND OPPORTUNITIES SHAPING OUR STRATEGIES AND PLAN

• Affordability remains a core concern for many customers. Energex and Ergon Energy are committed to doing all we can to take the pressure off electricity prices by continuing to drive down our cost of distributing electricity.

• The Queensland government has set a target to achieve 50% renewable energy by 2030.

• The connection of solar energy continues to grow across both networks. During 2018-19, rooftop solar PV was being connected to our South East network at a rate of over 2,900 systems per month. In Regional Queensland the volume of new solar PV connections in 2018-19 was almost 50% higher than in the previous 12 months, with the total solar PV capacity added being 300% higher due to the connection of several large solar farms. The future intention of customers to install solar PV is strong, with 48% of households stating that they will have or intend to have a system in the next three years1.

• A growing number of households are installing a battery as part of their solar PV installation. Around 1% of all solar PV installations also have a battery installed and almost one in three Queensland households intend to install a battery storage system in the next 10 years (28%)2. It is expected that customers with batteries will increasingly participate in Virtual Power Plants (VPPs) and provide DR services from their battery to DR aggregators.

• A critical challenge for electricity networks is the ability to host increasing levels of DER. This will require collaboration with industry, evolution in connection standards, investment in smart grid technologies and digital platforms to better manage the high penetration of DER.

• Climate change is increasing the probability of extreme weather events and average temperatures. The economic implications on our electricity networks are potentially significant and therefore necessitates increasing network adaption and resilience, while also ensuring we can respond quickly and safely during and after extreme weather events.

• Many of our customers in remote areas of Queensland are serviced by low density three phase or Single Wire Earth Return (SWER) technology. Our SWER network is the largest in the world and includes 65,000 km of line. Around 4% of Ergon Energy’s customers are provided electricity via SWER.

• DER (e.g. solar pump) and/or Stand-Alone Power Systems (SAPS) can provide, in some cases, cost effective alternatives to network delivered electricity supply.

• Changes in regulation are currently under consideration that enable distributor and third party led SAPS to be installed where economically efficient.

• Peak demand continues to increase, albeit at a lower rate. Our network experienced record levels of peak demand in the summers of 2017, 2018 and 2019. Discrete areas of the network are experiencing strong growth, requiring augmentation projects to address demand growth.

• Changes to energy flows and demand are occurring due to growing numbers of DER and new technologies interacting with the grid. New daily load profiles are emerging with the ‘hollowing out’ of demand during the middle of the day due to distributed solar PV generation.

Page 9: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

Electrification of transport

Customer expectations

Regulation and policies

Intelligent Grid Enablement

• In Australia, there has been a very slow uptake of electric vehicles to date, but this is expected to increase. This is due to transport modes, including fleet vehicles and public transport, being increasingly electrified globally. This coupled with increasing affordability of Battery Electric Vehicles (BEV) battery packs, will see greater future uptake of BEVs in Queensland, driving greater electricity demand across the state.

• At the end of June 2019, there were 1,000 BEVs and almost as many Plugin Hybrid Electric Vehicle (PHEVs) registered in Queensland. With the recent release of several new models, this has grown to just under 2,000 BEVs and 1031 PHEVs (29 February 2020). By June 2021, it is forecast there will be around 6,500 EVs in total (PHEVs and BEVs) in Queensland.

• If EV charging is unmanaged, the additional load on the network is likely to coincide with the existing evening peak. Initial insights indicate owners of electric vehicles nearly always charge at home (83%), with many able to control when they charge (54%)3.

• Vehicle to Grid (V2G) charging technology, whilst at an early stage of development, is expected to provide a range of energy services including DR in the future.

• From our stakeholder engagement, we heard that there is strong support for continuing our DM Program. Key expectations from our customers and stakeholders include:

• To partner with them to manage network demand into the future

• To continue to provide incentives to customers and/or DM providers to provide DM solutions

• To extend the eligibility of load control tariffs to other customer groups (e.g. agriculture, large commercial and industrial) to help manage network demand

• To facilitate the integration of renewables into the network

• To help provide products and solutions to manage their energy, demand and prices

• This DM Plan is consistent with national regulations aimed at encouraging network businesses to make efficient planning, investment and expenditure decisions and to explore non-network options, including

• Distribution annual planning – refer to our Distribution Annual Planning Review and Reports (DAPRs) – Energex DAPR and Ergon Energy DAPR

• Demand Side engagement obligations – refer to our Demand Side Engagement Strategy

• Regulatory investment test for distribution (RIT-D) – refer to Energex consultations/Ergon Energy consultations

• This DM Plan is also consistent with national electricity reforms currently underway aimed at delivering customer-oriented electricity network transformation.

1 Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)2 Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)3 Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=46)

• The electricity market is evolving which presents a transition challenge for all participants, both new and existing. A successful transition will enable networks to integrate sophisticated energy management platforms provided by new market participants with their existing distribution management systems.

Page 10: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

CASE STUDY

Electric Vehicles (EVs): Discovering customer charging and energy useTo plan for network impacts associated with Electric Vehicles (EVs) we have partnered with the EV monitoring and charge management provider, Fleetcarma to undertake a research program on customer charging behaviour; both at home and away from home.

The research funded by the Demand Management Innovation Allowance Mechanism (DMIAM) will involve up to 200 EV owners (battery only and plug-in hybrid), with cars registered within Queensland. Those participating in the research will receive $100 and gain access to an online portal to see their charging and trip activity. An additional $100 will also be available for those owners who allow charging management of their EV. A range of different EVs will be selected, as well as, different households (e.g. with and without solar PV and batteries).

The study will give invaluable information on how EV owners use their vehicle and their approach to “refuelling” with electricity. This information will then be used to generate baseline electricity consumption profiles, showing

the demand on the network over time. These patterns will be used for network planning to ensure that, as the EV market grows, the network is able to meet the new demands being placed on it.

Page 11: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

CUSTOMER CHOICE AND CONTROL

LOWER BILLS FOR

VALUED SERVICESCLEAN ENERGY

TRANSITION

FAIR

NESS AND

INCENTIVES

SAFE, RELIABLE

AND SECURE

Cost efficient – working with end use

customers and industry partners to reduce peak

demand and improve network utilisation to

keep costs down

Customer centric – supporting end use customers in their

energy choices

Queensland renewable energy target – enabling

connection of distributed energy resources (DER)

to the grid

Improve safety, security and reliability –

by coordinating network and customer

resources to work together

Signalling the market – paying for DM

services where they deliver value

Fair and equitable – unlocking the value of demand

response for all end use customers, not just

those with distributed energy resources

11

Demand Management Plan 2020-21

Overview Our principles

OUR STRATEGY AND PLAN

The DM Plan for 2020-21 sets out how we will continue to work with our customers, DM providers and industry partners over the coming year. Our plan is ultimately about reducing network costs through implementing effective and efficient DM activities. We will build on our existing initiatives and deliver on our goal of providing a secure and reliable network. We will continue to listen to our customers, DM providers and industry partners and continuously strive to innovate to future proof our DM Program.

Our six guiding principles, that underpin the DM Plan, are based on the Energy Network Transformation Roadmap (ENTR)4 balanced scorecard. These principles have been used to prioritise our initiatives and activities. See figure 3 below.

Figure 3: Our principles

4 https://www.energynetworks.com.au/projects/

electricity-network-transformation-roadmap/

Page 12: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

12

Demand Management Plan 2020-21

Our strategies and initiatives

StrategyOur Program

DM Initiatives – what we will do

Related Initiatives – what we will

support

Ensure efficient investment decision making

We will continue to engage with customers and DM providers to seek DM solutions to provide cost-effective alternatives to network options.

This approach will enable us to leverage investment across the electricity supply chain and deliver efficient, well planned network expenditure and apply downward pressure to network prices in the longer term.

Broad based

Targeted

Investment Planning Process

Incentivise customer efficiency

We will continue to provide incentives to customers and DM providers to provide DM solutions as part of our approach for delivering efficient non network options to defer, avoid or complement network investment.

In the medium term, ’smart’ DER (e.g. demand responsive batteries or BEVs) are expected to provide an increasing proportion of DM solutions, either directly or via DR aggregators.

Broad based

Targeted

Investment Planning Process

Active customer response enablers

We will maintain direct control of customer loads using our existing Audio Frequency Load Control (AFLC) capability. We will complement this capability, where cost efficient, by procuring and dispatching DR.

The procurement and dispatch of DR will require investment in intelligent grid technologies and digital platforms. This will be implemented as part of Energex and Ergon Energy’s broader ‘Intelligent Grid Enablement’ investment plans.

This enhanced capability will reduce network augmentation requirements and increase DER hosting capacity.

DM Development Intelligent Grid Enablement

Manage two-way energy flows

We will trial and test DM solutions to increase DER hosting capacity while maintaining reliability and power quality performance at statutory levels.

This is in line with our customer expectations and the Queensland Government target of achieving 50% renewable energy by 2030.

DM Development Intelligent Grid Enablement

Transforming supply at the fringe of grid

We will continue to look for opportunities for DM to reduce the cost of electricity supply in remote areas.

DM can be used to reduce the size and cost of customer DER and stand-alone power systems (SAPS) and form part of an integrated, cost-effective alternative to traditional network solutions.

DM Development Fringe of Grid Transformation

Support our Program by investment in innovation

We will continue to undertake innovative trials and projects to test and validate DM solutions. These trials will be supported by funding available under DMIAM and will be targeted to accelerate future DM capabilities.

DMIAM DMIAM

Page 13: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Our program

Description 2019-20 2020-21 Focus areas 2020-25

Initiative: Broad based

This initiative is available to residential and small business customers across the whole network. It delivers direct control of loads during periods of extreme demand or emergency response, preventing area problems and network outages.

Incentives are provided to customers who enrol their PeakSmart air conditioners or connect their appliances to load control tariffs.

Incentives are also given to industry partners who install PeakSmart enabled air conditioners.

Existing • Continue to reduce costs of delivery.• Continue to align Ergon and Energex programs • Enhance the customer and community experience• Improve PeakSmart application process for Ergon

Installers and industry partners

Proposed to

continue

Initiative: Targeted

This initiative is available to customers and DM providers who can deliver DM solutions in specific areas of the network identified as having future network constraints.

Market engagement is undertaken to seek DM solutions from customers and DM providers.

Incentives are provided to customers or DM providers to provide DM solutions.

Existing • Continue to align Ergon Energy and Energex programs

• Continue to publish incentive maps that show where DM solutions are required

• Deliver on our Demand Side Engagement Strategy to improve market engagement

• Increase DM solutions (non-network solutions) delivered through Investment Planning Processes

Proposed to

continue

Initiative: DM Development

This initiative drives continuous improvement of existing initiatives and enabling future DM capability.

Existing • Enhance web content on DM activities• Enhance web content on electric vehicles

Tariffs• Support uptake of new load control tariffs• Support wider Ergon Energy/Energex uptake of new

tariffs• Finalise implementation of Queensland Government

funded Large Customer Adjustment Trial (LCAT) and Large Customer Adjustment Program (LCAP)

Fringe of Grid • Pilot customer DM program

Intelligent Grid Enablement• Prepare Load Control Strategy to guide future

investment in digital platforms• Support development of AS/NZS 4755.2. This

Standard provides framework for DR from customer appliances (including air conditioners, BEVs, hot water systems and pool pumps)

• Based on trial results, expand ‘solar soak’ using existing AFLC capability to increase DER hosting capacity.

Proposed to

continue

Initiative: DMIAM

The initiative supports future energy choices and DM capabilities that reduce long term network costs.

A suite of innovative trials and projects to test and validate DM products and processes are funded via DMIAM.

Every year progress on DMIAM projects are published, refer to our annual DMIAM (Energex/Ergon Energy).

Existing • Fringe of grid alternative supply options• Managing network and distributed energy resources

for fringe of grid areas• Facilitating enhanced distributed energy resource

connection• Evaluation of Home Energy Management Systems• Electric vehicle customer charging and energy use• Acquiring load management through energy services

market• Integrated urban development energy management

Proposed to

continue

Page 14: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

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Demand Management Plan 2020-21

CASE STUDY

Market delivered Demand Response (DR)As distributed energy resources become more common-place in homes, we need to better understand the value and opportunities they present for customers and the networks supporting them.

In October 2019, Energex commenced a pilot to trial DR using home energy management systems (HEMs) in up to 500 households across the Chapel Hill, North Lakes, Springfield Lakes and Wakerley areas. Five HEMS providers are participating in the pilot, offering varied energy management services and products.

The DMIAM funded pilot replicates a normal market where HEMS suppliers attract customers with the inherent value of their offers. Incentives for customer participation are paid to the HEMS provider instead of to the end customer.

The pilot will provide information on how HEMS providers can attract customers to take up their market solutions; the value of these solutions to the customer and network; the attractiveness of set-and-forget “smart” solutions; and how HEMS technology will integrate and communicate with the electricity network.

HEMs have the potential to save customers money on their electricity bills, give them access to new value opportunities and improve the use of their renewables, while maintaining their lifestyle. HEMs could also deliver benefits to the network through improved load factor and reduced impacts of peak generation from solar PV installations.

Recent research has shown customer interest in HEMs services is greatest around receiving personal recommendations on how to save and being able to remotely control appliances to manage electricity usage. Over half (54%) of survey participants would install a HEMS if it was $200 or less5.

If successful, both networks would be able to complement their existing legacy load control capability with cheaper, more flexible, sophisticated energy management platforms provided by energy service providers.

5 Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)

Page 15: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

15

Demand Management Plan 2020-21

COVID-19 impacts

Energex forecast expenditure and targets

Ergon Energy forecast expenditure and targets

DM PROGRAM BUDGET AND TARGETS FOR 2020-21

At the time of finalising the DM Plan, the level of impact the COVID-19 pandemic will have on the forecast spend and achievement of performance targets for 2020-21 is unclear and has not been included in the tables below.

The forecast expenditure to implement Energex’s DM Program for 2020-21 is estimated at $5.90 million, as show in Table 3. The table also provides the breakdown of performance targets for each initiative.

Future year MVA demand reductions may also change year to year dependent on program focus and customer uptake of new technologies.

The forecast expenditure to implement Ergon Energy’s DM Program for 2020-21 is estimated at $5.09 million, as show in Table 4. The table also provides the breakdown of performance targets for each initiative.

Future year MVA demand reductions may also change year to year dependent on program focus and customer uptake of new technologies.

InitiativeOperating

Expenditure ($,000)

Capital Expenditure

($,000)

Total Expenditure

($,000)

Demand Reduction

(MVA)$/kVA

Broad based 3,706 - 3,706 17.8 209

Targeted 1,226 - 1,226 16.3 75

DM Development

970 - 970 n/a n/a

Total for DM Program

5,902 - 5,902 34.1 n/a

DMIAM 1,100 - 1,100 n/a n/a

InitiativeOperating

Expenditure ($,000)

Capital Expenditure

($,000)

Total Expenditure

($,000)

Demand Reduction

(MVA)$/kVA

Broad based 841 - 841 3.5 242

Targeted 3,713 - 3,713 26.3 141

DM Development

543 - 543 n/a n/a

Total for DM Program

5,097 - 5,097 29.8 n/a

DMIAM 1,100 - 1,100 n/a n/a

Table 3: Energex direct costs (excludes overheads)

Table 4: Ergon Energy direct costs (excludes overheads)

Page 16: 2020-2021 Demand Management Plan - Ergon Energy · operate the distribution networks across Queensland. The Energex and Ergon Energy electricity distribution networks cover 1.7 million

2-2

0-0

139

ergon.com.auenergex.com.au

Ergon Energy PO Box 1090 Townsville QLD 4810

Energex Limited GPO Box 1461Brisbane QLD 4001