Bonus pay to power savvy
Discounts for avoiding peak-time usage
VICTORIANS will be paid to reduce their energy use on request in peak periods or extreme weather to help avoid largescale blackouts this summer.
The strategic “demand management” approach – already widely used overseas – will form a key part in efforts to keep the lights on in Victoria amid dire warnings of energy shortfalls if the state faces an extreme heatwave.
It comes after Australia’s energy market operator revealed this week urgent measures were needed in Victoria and South Australia to avoid an increased risk of energy shortfalls in the coming months.
Under the plan Victorian households and business will be able to volunteer to receive discounted bills from selected energy retailers to use less electricity at times of stress on the national grid.
Energy providers who will take part in the $30 million trial run by the Australian Energy Market Operator and the Australian Renewable Energy Agency will be announced in late October.
The scheme will provide incentive payments to consumers who volunteer to be on standby to cut their use – for as little as 30 minutes – during emergencies or on days of high electricity demand.
It will involve actions as small as turning down airconditioners or cutting backyard pool pumps for a short period.
Households would receive credits on their bill if they are called on to cut use, which could potentially cut up to $500 off an annual household power budget.
Energy retailers who take part in the scheme will be left to decide the method to recruit their customers and the discount rate payment for consumers.
Industry sources say the policy has the potential to deliver about 3000 megawatts of power to the national grid if widely adopted in the future.
It could remove the need to build new gas-fired plants which would only be called on occasionally.
Victorian Energy Minister Lily D’Ambrosio said demand management had previously been put in place briefly in July 2014 under the former Liberal government.
It is understood the Andrews government will not follow South Australia’s decision to use large-scale diesel generation to provide temporary back-up power supplies this summer.
Instead it will work with AEMO, which will compensate businesses who feed their private generators into the grid when emergency power is required.
The recent closure of Hazelwood power station has led to a “tight” supply and demand balance in the national electricity market, which is more vulnerable than ever to the loss of output.