ARENA & AEMO Demand Response – Request for Information

Following the announcement 10 days ago, the following notice landed in my mailbox this morning.  I have copied it here for those who are interested.


Request for Information

In May 2017, the Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO) entered into a Memorandum of Understanding to jointly develop proof of concept projects and programs that support the integration of renewable energy while maintaining system reliability and security.

As part of these joint efforts, ARENA and AEMO plan to pilot a demand response initiative to drive innovation in how we manage the grid with high levels of variable output from renewable energy.
Key features:
• Pilot program will aim to secure approximately 100 MW of demand response capacity by summer 2017/18
• ARENA expects to commit up to $22.5 million over three years to fund the pilot
• The program is expected to focus on South Australia and Victoria.

Initially, ARENA and AEMO are seeking to fund demand response to address emergency reliability issues on the grid (as defined under AEMO’s Reliability and Emergency Reserve Trader (RERT) mechanism).

However, through the funding program, ARENA intends to stimulate innovation in the provision of demand response by testing a range of technologies and approaches, and will seek to fund a portfolio of projects that will enhance market capability for delivery of demand response, and inform future market design approaches.

Under the program, energy users or their service providers (aggregators, energy retailers etc) who are successful with their funding application will have the opportunity to receive a grant from ARENA as an incentive, or availability payment, to provide standby capacity during emergency or reserve shortfall events.

Those who are called upon by AEMO to reduce their demand from the grid would receive a pre-agreed dispatch payment through AEMO’s Short-Notice RERT mechanism.

Through this request for information (RFI), ARENA is seeking initial market feedback on several aspects of the program:
1. potential projects that may be capable of delivering innovative demand response;
2. the structure of compensation that would be sought to provide that; and
3. any other comments on the design of the program, including how it could be structured on a competitive basis.

It is expected that following review of the RFIs, ARENA will call for applications for funding, commencing mid June, with applications due on or around mid July.

Applications will be assessed under ARENA’s Advancing Renewables Program.

Responses are due by Friday 2nd June 2017 at 12pm

Please note that on 25 May 2017 AEMO announced a call for Expressions of Interest under the Long Notice RERT.  For further information on this separate program, please refer to AEMO’s website.

Further Information: If you have any questions regarding the Request for Information, please contact