Demand management process

Our Demand Side Engagement Strategy

ActewAGL’s Demand Side Engagement Strategy aims to create a cooperative and proactive relationship with customers and proponents of non-network solutions and involve them with ActewAGL’s network planning and expansion. ActewAGL will then encourage customers and potential non-network service providers to participate in the ActewAGL demand management activities with the objective that future network problems can be met by a full range of solutions to achieve optimal economical and technical outcomes.

ActewAGL’s Demand Side Engagement Strategy objectives are:

  1. to embrace Demand Side Management (DSM) and provide opportunities to our customers and non-network service proponents to participate in resolving network and customer supply limitations
  2. develop and apply a transparent DSM process for network planning and development
  3. identify DSM options for individual and broad based demand management situations
  4. provide proponents of non-network solutions with simple and effective mechanisms for obtaining information on network development proposals
  5. develop demand management tools and industry alliances to readily facilitate non-network options

Demand side management planning process

This planning process describes how ActewAGL will investigate, assess, develop, implement and report on non-network options as a part of the demand side engagement strategy. This planning process undergoes strategic and tactical planning stages. The non-network options including demand side management are developed through these planning stages before implementation as final solutions. Depending on the type and nature of the network constraint non-network options, including DSM programs may require some time upfront to investigate, assess and develop as robust solutions to alleviate the network constraint and compare with the network supply side solutions.

Planning process chart shows ActewAGL’s DSM process for any given network constraint scenario. This planning process consists of the following three phases. 

  1. Evaluation phase.
  2. Assessment phase.
  3. Implementation phase.

ActewAGL Demand Side Management Planning Process (click the image for larger version PDF)

Demand Side Management Planning Process

Evaluation phase

The main objective of the evaluation phase is to identify the non-network options and DSM opportunities that may address increasing network demand or identified network constraints and evaluate their potential for development as DSM programs.

Initially the potential to alleviate any broad based network constraints using current broad based DSM programs will be evaluated. A broad based DSM capability study is undertaken and then current DSM programs will be updated if the potential to further alleviate constraints is identified.

The second step is to carry out detailed DSM capability studies involving customer cohort research to address the remaining peak and broad based network constraints identified through the 10 year demand forecasts which were developed as a part of the annual distribution system planning review. The customer cohort research is a critical part of studying DSM capability and is aimed at identifying customers’ priorities and the drivers that engage them in demand side management. The DSM capability studies may recommend potential options and provide details such as participants’ willingness to participate in the identified DSM options.
The next step is to customise the options identified by evaluating their potential in terms of demand reduction (MVA) and duration (hrs) on an annual basis.  To further develop confidence that a customised DSM option will alleviate a network constraint an initial test will be carried out on the requirements of the constraint.

The requirements may be based on:

  1. project size (capacity –MVA)
  2. upstream available network capacity
  3. forecast year that solution is required
  4. seasonal, time of day and duration variations
  5. projected growth rates
  6. predominant load type.

The initial test will involve an analysis of the main requirements behind the emerging constraint, determination of the extent to which demand is driving investment (including the amount of supply side investment that could be deferred) and the demand reduction required to resolve the constraint.

Public consultation

Initial public consultation is aimed at gathering additional information to determine the level of incentives which should be offered to the participants to make DSM schemes attractive. ActewAGL and proponents will co-operatively conduct technical studies to determine the suitability and effectiveness of the solutions. The financial benefits for all parties will be calculated at this stage to determine financial viability.

Assessment phase

The assessment phase aims to select credible DSM programs for the economic evaluation (NPV) alongside feasible network supply side solutions or implement as broad based solutions. The assessment phase recommends feasible DSM programs which have been validated and developed to a specification driven by the specific network constraint.

ActewAGL will assess all viable options from evaluation phase in relation to all applicable costs and benefits and select the options that maximises the economic and market benefits. All DSM options are summarised and analysed according to size (MVA), cost (both NPV and $/kVA), time of day, seasonality, time frames of delivery (anticipated plan approved date and anticipated completed by date) and reliability/risk. The technical studies will be based on published ActewAGL guidelines.

This investigation is considered to be a feasibility study and the accuracy of data and cost estimates must be commensurate with this level of analysis. We will use commercial and industrial alliances and a variety of analysis tools at this stage.  Public consultation and EOI may be carried out at this stage to confirm the demand reduction product offers under these DSM programs and the level of commitment by participants. If required a pilot scheme will be developed and implemented to assess the performance of the selected DSM program and test the effectiveness of applied tariffs and financial incentives. If the DSM programs prove to be technically and commercially feasible then they may be approved in principle as standard future demand management solutions. 

In the final stage of the assessment phase the feasible non-network or DSM programs developed for specific peak based network constraints will be assessed along with supply side options for the highest NPV option where feasible broad based DSM options will be available for implementation. If the estimated cost of the most expensive credible option exceeds $5 million then the RIT-D process and guidelines must be applied to the assessment.

Implementation phase

The implementation of a non-network option is subjected to the approval by ActewAGL and other necessary planning authorities. If a non-network or DSM option is selected as a preferred solution for the alleviation of a specific network constraint then ActewAGL will request the detailed design and an implementation plan with clearly defined deliverables, schedule and cost estimates. ActewAGL technical guidelines will be made available for the non-network proponent or the appointed engineering consultants for the design of the solution.

The broad based options will be implemented across the ActewAGL network with tariff based financial incentives to customers.

Negotiations process

Negotiations may be necessary during the development of non-network options. Any non-negotiable conditions are to be identified and agreed upon early in the engagement and consultation stage. Our process for negotiation will adhere to the following principles.

  1. Provide fair and reasonable conditions and requirements for the non-network options to be developed and connected into the ActewAGL network.
  2. Ensure all legal, licence and regulatory conditions are complied with in addition to all applicable industry and other relevant standards. These requirements are non-negotiable.
  3. Ensure that the non-network options can be developed as sound and robust solutions to meet the specific requirements of the ActewAGL network.