Systems to Implement Demand Response in New Zealand

Abstract

According to the Federal Energy Regulatory Commission, Demand Response (DR) is defined as: “Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.” In the US, experience with regional electricity markets suggests that active DR is crucial to both power system reliability and market efficiency. Accordingly, efforts to enable demand-side participation in the US are providing significant opportunities for end-customers, load serving entities, and independent system operators. In New Zealand, a number of DR initiatives exist or are coming online. Given the importance of DR initiatives and systems to enable participation in the demand side of the market, the purpose of this paper is to provide a detailed understanding of the various systems already installed, and potentially required, to implement DR in New Zealand. Types of DR considered include interruptible load, Transpower’s demand response initiatives, demand side bidding and forecasting, dispatchable demand, and ripple control. This paper also reviews which groups of market participants are using DR, and for what purpose. Currently, most DR is incentive based, but the deployment of smart meters at consumers’ premises may lead to significant adoption of price based DR, such as initiatives to introduce time of use and peak pricing to domestic users. Home Energy Management Systems (HEMS) have been defined as any product or service that monitors, controls, or analyzes energy in the home, and may be utility or non-utility based. HEMS and the initiatives mentioned form a rapidly emerging fabric of DR systems in NZ.