Energy Users who participate in this category trigger their Demand Response themselves in response to the most dynamic form of time-sensitive pricing signal – that of real time pricing (commonly referred to “spot exposure” in the NEM).
It’s labelled “Not Dispatchable” in the NERC diagram because it is not dispatched by a 3rd party, but instead by the Energy User themselves. That’s different than these other”Dispatchable” methods, where the curtailment is triggered (dispatched) by a 3rd party – the AEMO, or some other party.
Both types are Demand Response – they are just different types.
For energy users who have opted for some form of spot exposure (e.g. in their retail contract, or purchasing directly from the AEMO as a Wholesale Market Customer), they stand to benefit from some fundamentals in the “energy-only” market design of the NEM (discussed here).
As a result of the design of an Energy-Only market design:
Feature #1) For most of the hours in the year, wholesale spot prices are at levels below the generator’s Long-Run Marginal Cost of production – generally above their Short-Run Marginal Cost (variable fuel and O&M).
Feature #2) In conjunction with Feature #1, for a small (and variable) number of half-hours every year the spot price spikes to levels significantly above a generator’s Long Run Marginal Cost – even up to the Market Price Cap.
This presents an ideal opportunity for certain types of energy users to gain benefits from this particular form of Demand Response – which, in simple terms, means consuming for the vast majority of time that spot prices are low, and curtailing for the relatively small number of trading periods where spot prices are high.
As a company, we (GLOBAL-ROAM Pty Ltd, the developers of this site) have appreciated the opportunity to support energy users operating in this manner since as far back as 2002.
- Over the 15+ years since we started our journey, we have been encouraged to see a growing number of large industrial energy users adopt this form of electricity procurement strategy to help to lower their average cost of electricity consumed across a year.
- In January 2019 we posted this overview of some of the highlights we’ve seen in our own Demand Response journey.
In terms of other materials we have posted about Real Time Pricing, as a means of facilitating demand response:
- Over on our WattClarity® site, we posted this article on WattClarity back in October 2009 to outline some of the benefits of this type of approach; and
- Also on WattClarity (since that time) have posted numerous other articles pertaining to Demand Response, as time has permitted.
- There are also other articles on this Demand Response site tagged this way.
We would be happy to discuss your particular situation with you – just provide us your details on this form (including your phone number), so we can start off with a phone call – or just call us directly on +61 7 3368 4064.