Beating Down the Power Peaks

01 Apr 2005Archived News Energetics in the News


Signing a contract to have your power disconnected when others need it most could lead to sustainable savings and fewer power stations, writes Garth Lamb.

For a power network to be reliable, electricity production must match up to maximum demand. In the real world, where energy consumption can swing dramatically by the minute, this can be a difficult and expensive proposition.

Coal-fired, base load power plants provide the cheapest energy. But peaking plants that come on-line as consumption rises are higher-cost operations due to their irregular use. Peak price spikes occur less than one per cent of the time, and yet they account for more than 10 per cent of capital invested.

These fluctuations can see prices go from $12 per MW/hr to a stiff $10,000 per MW/hr as demand changes. This differential creates opportunities for medium to large industrial customers to reduce the impact of power peaks on the market, and reap some rewards themselves.

"Customers can choose to turn off a component of their electricity demand at these times and receive a significant payment for peak lopping as well as reducing the risk of power failure," said Energy response technical director, Ross Fraser.

Peak lopping, or reducing energy consumption at the time of the daily peak, is part of the suite of tools known as demand side management (DSM). While the domestic energy draw is generally to blame for the price peaks, due particularly to air-conditioners, the easiest place to combat them is engaging the large energy users in industry.

Peak Lopping Practices

A range of peak lopping methods are available, depending on a company's operational and energy needs. Contracts can be organised either through companies that offer specialist DSM advice, such as Energy Response and Energetics, or directly through energy retailers.

One option is interruptible, or load shedding contracts, where a company agreed to switch off a major appliance, say, 10 times a year with only one hour's notice. In return they could be offered either reduced energy prices - a Country Energy spokesperson said this could be around 5-8 per cent off their annual tariff - or paid directly for not using energy during the peak. For example, if it had a large cool room where the temperature changes little over an hour, it could be paid substantially more to turn off the machine that it earns keeping it on.

Alternatively, a whole factory could be on an interruptible contract. During a heatwave, when domestic power use is likely to be high, a customer could agree to shut down the entire facility with just one day's notice.

Interruptible contracts are usually negotiated directly between retailers and large energy users. Energy consultants can help energy users in discussions around key points. Energetics' manager of environmental products, Cheryl Smith, said these include who bears responsibility for the cost of any necessary equipment upgrades to ensure interruption can occur safely, and the process for calculating compensation payments for each interruption event.

Variable tariffs could be another way to encourage companies to manage energy use effectively. A company could program its activities so that energy intensive processes were run during shoulder or off-peak times. Metal presses, for example, could be used between 7am and 1pm and then activities such as assembly work undertaken in the afternoon.

An alternative in the commercial area is setting air-conditioners to pre-cool buildings during off-peak periods, then having them turned down or off during the peak.

Each energy user will need to explore the options that best suit their operation. But with last year's World Energy Congress in Sydney being told $1 trillion would need to be invested in new global power infrastructure over the next 10 years, such options are becoming of far greater interest.

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