The Australia Institute’s Climate & Energy Program says the demand response pilots announced by the Australian Renewable Energy Agency (ARENA) and Australian Energy Market Operator (AEMO) will reduce electricity prices for consumers.

“ARENA and AEMO have taken action to deliver security through innovation, something that should be welcomed by all sides,” Australia Institute executive director, Ben Oquist said.

“The ten demand response pilots will be a great boost to Australian innovation because they include technology by local start-ups Greensync, Reposit, Wattwatchers and Redback.

“These projects will deliver 143 MW of demand response by December, which means that AEMO has now secured 1,800 MW of peak capacity for this summer, more than accounting for the closure of Hazelwood power station.

“These projects will start delivering by December, which provides a positive circuit breaker to the energy debate, proving that Australian innovation can deliver security in a post-baseload world.

“The demand response round has contracted more capacity at a lower price than predicted, which is a great endorsement of the technology and the process managed by ARENA.

“Demand response will benefit energy consumers and lights the way to the emerging energy paradigm in which households use their batteries and solar PV to contribute generation, network, peak load and frequency control services to the grid.

“Australia has a peak load problem, not a baseload problem and these pilots will accelerate our progress towards a solution.

“It is smarter to plan for periods of peak demand by offering incentives to consumers to save electricity than to build new power stations,” said Mr Oquist.

A recent report by The Australia Institute’s Dan Cass explains that demand response allows energy consumers to sell ‘negawatts’ of reduced demand into the National Electricity Market, to keep the grid stable and reduce price peaks.