ELECTRICITY demand will be cut by the amount of power needed for 50,000 airconditioners on the hottest days this summer under a deal between NSW transmission network operator TransGrid and big energy users like manufacturers, universities and data centres.
The deal – a forerunner of the kind of demand management arrangements recommended in a Senate report to be tabled on Thursday this week – means the big users are paid to switch off an agreed quantity of power for an agreed period of time on days when electricity demand peaks.
It was brokered by demand side response company EnerNOC, which aggregates and guarantees the demand reduction, and will help cut the huge peaks in demand that occur for fewer than 40 hours a year but require infrastructure spending that accounts for about 25 per cent of household power bills.
It could pave the way for similar deals with businesses and even households if smart meters are rolled out nationwide.
Smart meters collect more information about electricity use than ordinary meters. They can also send and receive information and remotely control electricity use, such as a proposal in a Senate report that households agree to savings by letting power companies shut down their appliances during peak periods of demand.
Iain MacGill, an electrical engineer and director of the University of NSW centre for energy and environmental markets, said the state government must ”bite the bullet” and commit to a potentially costly roll-out of smart meters to manage NSW’s electricity.
The Senate report, which will form the basis of the federal government’s package of power price reforms to be put to the states in December, proposed a national roll-out of smart meters.
Only about 20,000 NSW homes have the meters, compared with 1.3 million in Victoria, where the government aims to put them in every home by the end of next year.
As revealed by Fairfax Media on Wednesday, the Senate report into electricity pricing will recommend accreditation for demand side management companies, as well as a shift to ”cost reflective pricing” – allowing consumers to avoid the expensive peaks.
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