2019-20 Demand Management Plan - Energex · 2 Demand Management Plan 2019-20 Definitions, abbreviations and acronyms 50 POE 50% Probability of Exceedance (Peak load forecast based

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9-0

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Demand Management Plan2019-20

2 Demand Management Plan 2019-20

Definitions, abbreviations and acronyms

50 POE 50% Probability of Exceedance (Peak load forecast based on normal expected growth which has a 50% probability of being exceeded in any year)

ADMD After Diversity Maximum Demand

AEMC Australian Energy Market Corporation

AEMO Australian Energy Market Operator

AFLC Audio Frequency Load Control

BESS Battery energy storage system

COAG Council Of Australian Governments

CSIRO Commonwealth Scientific and Industrial Research Organisation

DER Distributed Energy Resource. Whilst typically referring to renewable energy connected to the distribution network, can also refer to batteries, EV’s and demand response energy systems connected at LV/MV/HV.

DERMS Distributed Energy Resource Management System

DM Demand Management

DMIAM Demand Management Incentive Allowance Mechanism

DMS Distribution Management System

DNSP Distribution Network Service Provider

DNRME Department of Natural Resources Mines and Energy

DR Demand Response

DSO Distribution System Operator

ENTR Energy Networks Transformation Roadmap

ENA Energy Networks Australia

EV Electric Vehicle

HV High Voltage

HEMS Home Energy Management System

IoT Internet of Things

LV Low Voltage

LVNMP Low Voltage Network Management Platform

MV Medium Voltage

NEM National Electricity Market

NER National Energy Rules

Orchestrate The coordination and optimisation of the operation of DER to meet the needs of the power system value chain

PV Photovoltaic. Used interchangeably with solar power

SPS Stand-alone Power Systems

SWER Single Wire Earth Return

Roadmap Our Future Grid Roadmap available on our Talking Energy website

TEDI Tariff reform principles: Tariffs, Education, Dynamic Incentives, Information

3Demand Management Plan2019-20

Contents

Message from the Executive General Manager Asset Safety and Performance 4

1. Introduction 51.1 The Purpose of the Demand Management Plan 51.2 What’s in the DM Plan 5

2. About Energy Queensland 62.1 Our businesses 62.2 Our networks 6

3. Demand management 83.1 What is demand management? 83.2 Customers enrolled in our Demand Management Programs 103.3 Our DM Capability 12

4. Drivers shaping our plan 144.1 Affordability of electricity 144.2 Demand and Customer Forecasts 144.3 Customer engagement 164.4 Regulation and Policies 18

5 Our DM Plan 195.1 Overview 195.2 Our Principles 205.3 Our strategies and activities 21

Strategy 1: Ensure efficient investment decision making 20Strategy 2: Incentivise customer efficiency 21Strategy 3: Active customer response enablers 23Strategy 4: Manage two way energy flows 25Strategy 5: Transforming supply at the fringe of grid 26Strategy 6: Support our program by investment in innovation (DMIAM) 26

6 Our Plan for 2019-20 296.1 Energex forecast expenditure and targets 296.2 Ergon Energy forecast expenditure and targets 29

Appendix A – Active Non network alternative (NNA) generation contracts 30Appendix B – DM activity by customer segment 31Appendix C – Broad Based, Targeted and DM Development Initiatives 32Appendix D – Network Characteristics 34


I am pleased to share with you the Demand Management Plan (DM) Plan for Energy Queensland Limited’s (Energy Queensland) two electricity distributors, Energex in the South East and Ergon Energy Network (Ergon Energy) in regional Queensland. Each year Energex and Ergon Energy publish a DM Plan to engage and inform our stakeholders on our planned DM Program for the next five years.

Our customers are clearly telling us their primary concern is affordability and that we shouldn’t spend any more than is necessary on maintaining, operating and upgrading our network. Our Customer Advocate groups have told us that they strongly support DM initiatives and the role they can play in balancing affordability and good outcomes for customers. Customers are asking us for more choice and control over their electricity and many

have invested in distributed energy resources (DER) such as solar as a result. The challenge for electricity networks is to leverage this customer led investment to improve and complement efficient investment in networks.

In response, Energy Queensland has developed Our Future Grid Roadmap (Roadmap) which sets out how we will respond to this challenge. The DM Plan delivers important elements of the Roadmap. Through delivering the DM Program, we have developed strong relationships with customers and industry partners. These relationships will continue to be critical in delivering the DM Plan and the Roadmap alike.

An opportunity I am particularly excited about is calling on DM services from the increasing number of internet enabled DER (like solar PV and batteries) and appliances. In

our DM Plan, we are leveraging new technology to complement existing load control technology to provide lower cost alternatives to network investment.

Finally, I would like to thank all the customers and industry partners already participating in our DM Program. I look forward to working with our customers and industry partners during 2019-20 and into the next regulatory period, as we continue to evolve our Program to meet future network and customer needs.

Peter Price Head of Corporate Strategy, Executive General Manager Strategy, Asset Safety and Performance

Message from theExecutive General Manager Asset Safety and Performance


1. Introduction

1.1 The Purpose of the Demand Management PlanEach year Energex and Ergon Energy publish a Demand Management Plan (DM Plan) to engage and inform our customers and industry partners on our planned DM Program for the next five years. It forms part of a suite of strategies including Our Future Grid Roadmap (Roadmap)1 to deliver safe, affordable, secure and sustainable energy solutions. Consistent with Energy Queensland’s purpose, the DM Plan, outlines initiatives that:• are customer centric – supporting

customers in their energy choices• are cost efficient – working with

customers and industry partners to deliver cost efficient initiatives to reduce peak demand and improve network utilisation

• improve safety, security and reliability – by coordinating network and customer resources to work together

• activate the market and transition – by paying for DM services where they provide value and responding to regulatory and market changes

• help achieve the Queensland renewable energy target – by enabling connection of distributed energy resources (DER) to the grid

• Are fair and equitable – by unlocking the value of demand response (DR), not just those with DER.

The DM plan meets Energex and Ergon Energy’s regulatory requirements under section 127C the Queensland Electricity Regulation, which requires an annual DM Plan to be submitted for each upcoming financial year.

1.2 What’s in the DM Plan DM involves working with customers and our industry partners to reduce demand to maintain system reliability in the short term and over the longer term, optimise investment across the electricity supply chain.

Our plan is organised into sections:• Sections one, two and three provide

information about us, our network, DM and customers participating in our DM Program

• Section four provides details the drivers shaping our strategy

• Section five details our strategy for the next six2 years and includes our principles, initiatives and activities

• Section six details costs and performance targets for the 2019-20 financial year.

1 Our Future Grid Roadmap is available on Talking Energy website https://www.talkingenergy.com.au/ourfuture-grid-roadmap

2 The Queensland Electricity Regulation requires a five year strategy to 2024, we have extended the strategy to align with the next AER regulatory period ending on 30 June 2025.

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford

ToogoolawahCaboolture

Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford


Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

Bamaga

Lockhart River

Pormpuraaw

Aurukun

Kowanyama

Normanton

Cairns

Cooktown

Townsville

Mackay

Coen

Gununa, Mornington Is.

Burketown

Doomadgee

Camooweal

Boulia

Bedourie

Jundah

Windorah

Birdsville

Mapoon

Georgetown

Richmond

Charters Towers

Pinnacle

Moranbah

Rockhampton

Clermont

Middlemount

Emerald

Springsure BiloelaMonto Gin Gin

ChildersBiggenden

Mundubbera

Wandoan

Roma

Quilpie

Blackall

BarcaldineLongreach

Winton

KilkivanMurgonKingaroy

Toowoomba

MillmerranWarwick

Stanthorpe

Chinchilla

St GeorgeCunnamulla

Charleville

Tara Dalby

Moura

Theodore

Mareeba

Atherton

Ravenshoe

Mossman

Innisfail

Tully

Ingham

Home Hill

BowenProserpine

Sarina

Yeppoon

Blackwater Gladstone

Gayndah

Yarraman

Miriam Vale

Bundaberg

Hervey Bay

Mt Isa Cloncurry

Julia CreekHughenden

Palm Island

Napranum

Maryborough

Brisbane

TORRES STRAIT

Boigu Is.Dauan Is.

Darnley Is.Yorke Is.

Murray Is.

Coconut Is.Warraber Is.

Stephens Is.

Mabuiag Is.Yam Is.

Badu Is.

Wasaga, Horn Is.

Hammond Is.

Thursday Is.

Kubin, Moa Is.

Saibai Is.


2. About Energy Queensland

2.2 Our networksThe Energex and Ergon Energy electricity distribution networks cover 1.7 million km2 across Queensland. Ergon Energy supplies electricity to homes and businesses over a vast area covering around 97% of the State – from coastal and rural centres to remote communities of outback Queensland and the Torres Strait. Ergon Energy also services 33 isolated systems. Energex’s network supplies electricity to homes and businesses in the South East region of the State. The South East Queensland region includes the major urban areas of Brisbane, Gold Coast, Sunshine Coast, Logan, Ipswich, Redlands and Moreton Bay.

2.1 Our businessesEnergy Queensland came together as a Group in June 2016 to build on our proud history of powering Queensland and create a community-focused energy business ready for the future. The Group includes our two electricity distribution network service providers (DNSPs), Energex in the South East and Ergon Energy in regional Queensland. Together these businesses build, operate and maintain the ‘poles and wires’ that bring power to customers’ homes and businesses across Queensland.

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford


Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

=

QUEENSLAND

Gympie

Noosa

Nambour

Maroochydore

Caloundra

Kilcoy Woodford


Redcliffe

BrisbaneGatton

IpswichBeenleigh

Boonah Beaudesert

Surfers Paradise

Esk

Fernvale

NEW SOUTH WALES

Bamaga

Lockhart River

Pormpuraaw

Aurukun

Kowanyama

Normanton

Cairns

Cooktown

Townsville

Mackay

Coen

Gununa, Mornington Is.

Burketown

Doomadgee

Camooweal

Boulia

Bedourie

Jundah

Windorah

Birdsville

Mapoon

Georgetown

Richmond

Charters Towers

Pinnacle

Moranbah

Rockhampton

Clermont

Middlemount

Emerald

Springsure BiloelaMonto Gin Gin

ChildersBiggenden

Mundubbera

Wandoan

Roma

Quilpie

Blackall

BarcaldineLongreach

Winton

KilkivanMurgonKingaroy

Toowoomba

MillmerranWarwick

Stanthorpe

Chinchilla

St GeorgeCunnamulla

Charleville

Tara Dalby

Moura

Theodore

Mareeba

Atherton

Ravenshoe

Mossman

Innisfail

Tully

Ingham

Home Hill

BowenProserpine

Sarina

Yeppoon

Blackwater Gladstone

Gayndah

Yarraman

Miriam Vale

Bundaberg

Hervey Bay

Mt Isa Cloncurry

Julia CreekHughenden

Palm Island

Napranum

Maryborough

Brisbane

TORRES STRAIT

Boigu Is.Dauan Is.

Darnley Is.Yorke Is.

Murray Is.

Coconut Is.Warraber Is.

Stephens Is.

Mabuiag Is.Yam Is.

Badu Is.

Wasaga, Horn Is.

Hammond Is.

Thursday Is.

Kubin, Moa Is.

Saibai Is.


7,247

3

1.7 million

220,000km

employees

network control centres

power poles

powerlines

2.3 million

34,500GWh

513,200

2,360MW

4,920MW 2,601MW

connected customers

electricity delivered a year

solar energy systems connected

renewables connected

South East Queensland peak demand

Regional Queensland peak demand

34stand-alone and grid-connected power stations

Regional network - Ergon Energy Network

Isolated supply - Ergon Energy Network

Ergon Energy Retail

South East Network - Energex

Our service area

Flexible load shape Peak clipping Conservation Load shifting






Demand Management Solution Description

Active Energex/Ergon Energy DM activities

Direct load control With direct load control, customers pay reduced tariffs and/or receive incentives in return for allowing the network operator to remotely shut down or reduce consumption of selected electrical equipment owned by the customer (e.g. air conditioners, water heaters). Direct communication links between the network operator and the customers’ electrical equipment allow remote switching of customer’s loads at short notice in response to particular problems (e.g. peak demand or export) on the electricity network. This can be applied to periods of either peak load or peak generation.

• PeakSmart air conditioning

• Appliances on load control tariffs

Demand response With DR customers get a financial incentive for changing (reducing or shifting) their electricity use in response to a signal from the network operator and/or high prices in the electricity market. DR is typically used by network operators to provide targeted load reductions on their networks.

• DR from customer solar PV and batteries (trials)

Distributed generators Customers are paid to install, or networks install generators at a lower cost than building network. These generators are relatively small and modular and connected directly to the local distribution network. Distributed generation can inject energy into the electricity network close to the load it serves and reduces demand on the portion of the network which would otherwise supply the load.

• Mobile generation plant (network owned)

• Contracted Non-network Alternative generation (customer owned)

Interruptible loads Customers have a contract/agreement or are on a tariff structure which financially rewards them to shed loads at certain times. Interruptible loads provide the right for a network operator to interrupt supply to a customer, typically during a system emergency.

• Interruptible load contracts are in place with customers under Target Area Incentives

Energy efficiency Customers are financially rewarded through reduced energy operating costs. The objective of energy efficiency projects is to reduce the quantity of energy used per unit of output or delivered service. Energy efficiency leads to reduced load levels on the electricity network across the day. Energy efficiency can be used to slow load growth on the network.

• Energy efficiency projects are partly funded under Target Area Incentives.

3. Demand management

3.1 What is demand management?DM involves working with our customers and industry partners to reduce demand to maintain system reliability in the short term and over the longer term, defer the need to build more ‘poles and wires’. DM solutions can be in front or behind the meter and include:

• direct load control • distributed generation, including

standby generation and cogeneration

• DR • energy efficiency • fuel substitution (e.g solar PV

and EVs)

• interruptible loads • load shifting • power factor correction • pricing/tariffs.

Further information on each of these and examples of Energex or Ergon Energy activities are provided in Table 1.






Demand Management Solution Description

Active Energex/Ergon Energy DM activities

Power factor correction Customers on demand tariffs with good power factor have reduced demand costs. Power factor in alternating current (AC) circuits is the ratio of actual energy consumed (watts) versus the energy flowing through the wire (also known as apparent power). Power factor correction aims to reduce the difference between the energy consumed and the apparent power so as to reduce energy wastage and network losses. It can reduce the size of network assets required.

• Power factor correction projects are partly funded by Target Area Incentives.

Renewable energy Customers with renewable energy resources such as batteries or solar PV are financially rewarded through lower electricity bills. The use of renewable energy has a similar impact on demand as energy efficiency in that demand is reduced across the day. The intermittent and distributed nature of energy from these sources has presented challenges to networks used to dealing with one way flows.

• DR from customer solar PV and batteries (trials)

Load shifting Customers pay reduced electricity costs by shifting their use to non-peak times that have lower tariff prices. Load shifting involves altering electricity use patterns so that on-peak electricity use is shifted to off-peak periods. To achieve network-related objectives, load must be shifted away from the peak period on the whole network or on the relevant network element.

• Appliances on load control tariff

Tariffs/pricing Customers are rewarded by reducing demand during peak periods. Pricing initiatives are typically used to change customers’ energy use and behaviour to reduce demand at the time of the system peak. This approach will change over time to include expanded use of Load Control and alignment with a capacity based future. Typically, pricing initiatives are applied to particular customer classes and usually not targeted to geographical areas where network constraints occur. Smart meters can assist with tariff/pricing programs as they enable the implementation of time-varying pricing. Also data from smart meters provides customers with detailed information from which to develop demand reduction plans.

• Appliances on load control tariff

• Promote the benefits of tariff reform and DM opportunities

(Source: adapted from http://www.efa.com.au/Library/David/Published%20Reports/2010/InternationalBestPracticeinEEandDSMforNetworkSupport.pdf)Table 1: Demand Management Solutions


3.2 Customers enrolled in our Demand Management Programs

Around 1.1 million customers are participating in our DM Program, including households, businesses and major customers. These are summarised in Table 2.

These activities provide incentives to households that connect electric hot water systems, pool pumps and other appliances to load control tariffs and to customers who enable their PeakSmart air conditioner. These activities are supported by manufacturers, appliance retailers, installers and builders.

Ergon Energy region Energex region

PeakSmart air conditioning

On days of extreme demand, PeakSmart air conditioners can be signalled by the network operator to reduce their energy consumption.

Approximately 5,600 air-conditioners rewarded

Over 102,000 air-conditioners rewarded

Control load tariffs – hot water, pool pumps and other appliances

Hot water systems and pool pump connected to control load tariffs are switched on and off to ensure they operate outside of peak demand periods.

Approximately 320,000 households with load control tariffs

Approximately 705,000 households with load control tariffs

These activities offer incentives to small, medium and large businesses located in areas where demand reductions are required (Target Areas) and install or upgrade equipment/appliances to reduce peak electricity demand. These activities are supported by suppliers, industry associations, aggregators, energy retailers and national brands (with multiple premises).

Ergon Energy region Energex region

Target Area Incentives: Power factor correction (PFC)

Power factor correction equipment is installed to improve energy supply inefficiencies and reduce peak demand.

46 power factor correction installations rewarded to date

558 power factor correction installations rewarded to date

Target Area Incentives: Energy efficiency

Peak demand reduction through replacement/upgrade of lighting, motors, refrigeration and building management systems.

238 installations rewarded to date

260 installations rewarded to date

Non Network Alternative generation contracts

Peak demand reduction through contracted generation (customer or third party owned)

5 active contracts 1 active contract

Table 2: Participation in our DM programs


Energex and Ergon Energy: Managing Demand In Queensland

Premises with controlled load Premises with PeakSmart Premises with reduced demand in Target Areas


3.3 Our DM CapabilityThe outcomes achieved through the DM Plan, provide capability that can be called upon during times of peak network demand or as part of emergency response. This capability is called up through our Summer Preparedness Plan to minimise interruptions during summer season extreme weather conditions. Table 3 provides the sum total of our DM capability. The total capability realised will vary depending on weather conditions, time and switching regime.

This same capability can also called upon to provide DR for Australian Energy Market Operator (AEMO). A recent example of this was in November 2018, the Energex network was asked to respond to a Lack of Reserve (LOR). In this case, switching of hot water systems and pool pumps was altered to deliver the required demand reduction. Peak Smart air-conditioners could also have been included in the response, if greater demand reductions were required. Refer to case study below.

DM Program customers

Load under control (diversified) How our

customers help the network

Energex

(MW)

Ergon Energy

(MW)

Total

(MW)

Load control tariff 33 (hot water and pool pumps)

364 103 467 Reduce peak demand

Load control tariffs (Other appliances)

0 48 48 Reduce peak demand

Load control tariff 31 (hot water) 153 51 204 Reduce peak

demand

Peak Smart Air Conditioners 87 2 89

Improves reliability on extreme weather days

Contracted demand response 23* 26 49

Distributed generation (customer owned)

Network mobile and embedded generation

0 17 17Distributed generation (network owned)

Total 627 247 874

Table 3: Available demand reductions available from our customers*different to Appendix A due change in contracted MVA in April 2019

12:00

500

0

1000

1500

2500

3000

3500

4000

Load

- M

W

4500

2000

5/11/2018 Normal switching day

13:00 14:00 15:00 16:00 17:00 18:00

Target period to achieve additional demand reduction

19:00

Normal day windowload off

Event day windowload off

Event day windowload on

Normal day windowload on

20:00 21:00 22:00 23:00

6/11/2018 Event day

The additional load returned as a result of removing it from the target period and returning supply in a shorter time window (2.5hours versus 3 hours).

Typical return of control load smoothed over longer time period.


Case Study - Demand Response in Action – Lack of ReserveAEMO informed the market of a lack of reserve (LOR2) for the period between 4.30pm to 7pm on 6 November 2018 and requested a market response. A LOR2 signals a tightening of electricity generation supply reserves. During LOR2 situations, AEMO will make use of DR to provide more capacity in the market. Over the last few years around three LOR events have been called per year.

Energex responded to AEMO’s request by utilising its Broad based initiative. Switching of hot water systems and pool pump load under control was altered to achieve additional demand reduction between 4pm and 8pm. Under normal switching regime, Energex starts switching the bulk of controlled load off from 5pm and brings back on (staggered return) these loads from 6.30pm. The alternative switching resulted in additional load

being turned off during the event period. A maximum reduction of 113MW and 268MWh was achieved between 4pm and 5pm. This load was removed from the event period and when returned was staggered such to minimise network impacts. The following graph (refer to Figure 7) is actual Energex network load profile on 5th November (normal switching day) and 6th November 2018 (LOR2 event day).

Figure 7: Total Energex system load during a typical and alternative control load switching regime


4. Drivers shaping our plan

4.1 Affordability of electricityAffordability remains a core concern for many customers. We will do all we can to take the pressure off electricity prices by continuing to drive down the cost of distributing electricity. Energex and Ergon Energy are committed to proactively seeking DM solutions to reduce peak demand to defer and reduce network capital augmentation expenditure. A large component of the cost of delivering electricity is driven by the Regulated Asset Base (RAB) –the value of the collective portfolio of assets (e.g. poles and wires) across Queensland. DM reduces the need to build additional assets and therefore is an effective strategy to reduce the RAB, and in turn, reduce the cost of electricity distribution. Importantly, our DM Plan also provides incentives to customers which helps to improve the affordability of electricity.

4.2 Demand and Customer ForecastsEnergex and Ergon Energy’s investment plans include an ongoing maintenance or reduction in our replacement and augmentation expenditure – reducing our capex overall. Our replacement capex will form the largest share of our proposed capex spend and will be an increasing area of focus for DM. Augmentation capex will continue to focus on key localised growth areas and initiatives to support the transition to an intelligent grid. Both networks are experiencing changes to energy flows and demand due to the growing numbers of DER and new technologies interacting with the grid (refer to Figures 1 to 3 for an overview of solar PV, battery and EV forecasts). Our networks are experiencing lower minimum demand, greater variability in demand and lower energy consumption growth. These trends are coupled with climate change which is increasing the probability of extreme weather events and average temperatures. The last three summers were very hot, with record high temperatures, and new system peak demand records. This trend is expected to continue.

Num

ber o

f ele

ctric

veh

icle

s

Forecast Period

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

0

20,000

40,000

60,000

80,000

100,000

120,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

Fore

cast

BES

S up

take

in Q

ueen

slan

dN

umbe

r of s

olar

PV

Inst

alla

tions

Energex Forecast Ergon Forecast

Forecast Period

Forecast Period

Energex Actual Ergon Actual

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

0

20,000

40,000

60,000

80,000

100,000

120,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

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2027

/28

Fore

cast

BES

S up

take

in Q

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Inst

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Forecast Period

Forecast Period


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

0

20,000

40,000

60,000

80,000

100,000

120,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

Fore

cast

BES

S up

take

in Q

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PV

Inst

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Forecast Period

Forecast Period


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

0

20,000

40,000

60,000

80,000

100,000

120,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

Fore

cast

BES

S up

take

in Q

ueen

slan

dN

umbe

r of s

olar

PV

Inst

alla

tions


Forecast Period

Forecast Period


0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

0

20,000

40,000

60,000

80,000

100,000

120,000

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

20/1

920

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4.2.1 Energex We expect our customer numbers to increase by 7.8% over 2020-25, based on connecting around 117,000 new customers. While customer growth remains strong, we expect our average annual peak demand growth to be lower than our historical highs, at 0.29%. This demand forecast takes account of the existing DM Program and DER forecasts, including solar PV, battery and Electric Vehicles (EVs).Refer to Figure 4.

Whilst demand growth has flattened at a system level, we expect some localised areas to experience higher than average growth. These include Caloundra South, Yarabilba, Ripley, Coomera, Petrie, Bulimba and Queensport, which are experiencing significant urban infill. Commercial and industrial areas located at Amberley, Willowbank and Fisherman Island are also expected to have higher than average growth. Where feasible and cost efficient, our Targeted DM initiative will be run in areas of localised demand growth.

4.2.2 Ergon Energy Network We expect our customer numbers to increase by 7% over 2020-25, based on connecting around 60,000 new customers to our network in regional Queensland. While customer growth remains strong, we expect our average annual peak demand growth at 0.38%. This demand forecast takes account of the existing DM Program and DER forecasts, including solar, batteries and EVs. Refer to Figure 5.

We expect localised areas of the network to experience higher growth. Where feasible and cost efficient, our Targeted DM initiative will be run in these, and other areas of localised demand growth.

Electric vehicle uptake in Queensland

Solar PV Installations in Queensland

Battery uptake in Queensland

Source: EQL forecast data (unpublished)



Figure 1: Solar PV Installations in Queensland

Figure 2: Battery uptake in Queensland

Figure 3: Electric Vehicle Uptake Queensland


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2010 - 15 (Previous Period) 2015 - 20 (Current Period) 2020 - 25 (Forecast Period)

Figure 4: Demand and Energy Trends on the Energex network

Figure 5: Demand and Energy Trends on the Ergon Energy network

4.3 Customer engagementTo ensure we deliver a successful DM Program, we continually engage with our stakeholders and customers. These insights in turn shape our DM Plan. Our stakeholders include government, industry regulators and community and industry groups.

Across our engagement there was strong support for continuing our DM Program and collaborating with stakeholders and customers around non network alternatives. Stakeholders want to see DM implemented to provide a cost effective and market driven solution, as an alternative to building network.

Refer to Figure 6 for the key messages we heard from our stakeholders and customers, and how we have responded to these in the DM Plan. For further details refer to Customer Engagement Outcomes Report available on the Talking Energy website.

87%*of air conditioning installers are willing to promote and install PeakSmart signal receivers for customers if given a financial incentive.*PeakSmart research, 2017

73%*did not notice any change to their comfort level during summer PeakSmart events.*PeakSmart research, 2018


What we heard from our stakeholders and customers

How we have responded in our DM Plan

They expect us to collaborate with and provide incentives to customers and the supply chain to assist in DM delivery and uptake.

Our customers and industry partners want financial incentives for participating in DR solutions, and they want easy customer friendly interactions with us to claim their rewards.

Some customers are willing for the network or a third party to manage selected household appliances to prevent localised outages in extreme weather events.

Customers are willing to participate in DR programs but do not want their lifestyle impacted upon.

Strategy 2: Incentivise customer efficiency• Broad based Initiatives• Targeted Initiatives

Strategy 3: Active customer response enablers• Undertake market scan and procurement of DR to

complement Audio Frequency Load Control (AFLC)

Strategy 5: Transforming supply at fringe of grid

Customers want energy solutions and education on tariffs, new technologies to deliver cost savings.

Strategy 2: Incentivise customer efficiency• DM advice• Support growth in DM products and solutions• Business Load Control Opportunities

Strategy 5: Transforming supply at the fringe of grid• DM for SWER customers

They want us to facilitate the integration of renewables into the distribution network.

Customers are willing to trial and use new technologies; with the premise of reducing the cost of their energy bills.

Strategy 4: Manage two way energy flows• Support activities

Strategy 5: Transforming supply at fringe of grid• Support activities

Strategy 6: Support our program by investment in innovation• Trials and projects

They expect us to partner with the market in devising customer solutions to manage network demand into the future.

They want us to help develop and activate the DM market and for our programs to complement market solutions, but not at the risk of dampening third party market maturity.

Strategy 1: Efficient investment decision making• Implementation of Demand Management Incentive

Scheme

Strategy 2: Incentivise customer efficiency• Broad based Initiatives• Targeted Initiatives

Strategy 3: Active customer response enablers• Undertake market scan and procurement of DR to

complement AFLC• Support development of DR standards• Support growth in DM products and solutions

Strategy 5: Transforming supply at fringe of grid

They want us to protect legacy load under control to manage network demand.

Strategy 2: Incentivise customer efficiency• Broad based Initiatives

Strategy 3: Active customer response enablers• Develop network legacy control strategy (AFLC)

Figure 6: What we heard and how we have responded


4.3.1 Energy CharterEnergy Queensland has signed the Energy Charter, a new industry-wide charter aimed at improving customer engagement and transparency across the energy sector. The Charter was launched in January 2019 and encourages collaboration across the energy supply chain to seek more affordable and improved energy outcomes for our communities and customers. It complements existing regulatory obligations by setting out direct commitments from energy businesses to their customers and stakeholders, with the intent to go above and beyond what is required by law so as to deliver improved customer outcomes. The purpose of the Energy Charter is to progress the culture and solutions required to deliver a more affordable, sustainable and reliable energy system for all Australians. It is focused on embedding a customer-centric culture and conduct in energy businesses to create tangible improvements in affordability and service delivery. Underlying the Charter are principles around putting the customer at the centre, affordability, safety, sustainability, reliability, improving customer experience and supporting vulnerable customers. Further information can be found on the Energy Charter website. Our DM Plan is aligned with purpose and principles of the Energy Charter.

4.4 Regulation and PoliciesRegulations and policies have also shaped our DM Plan as outlined below.

The electricity supply chain has changed substantially in recent years and is continuing to change. The previous supply model of one-way flows from large generators through transmission and distribution networks to customers is changing to a model of bidirectional flows. Customers have increasing opportunity to change their electricity demand, and to supply electricity, in response to price signals.

Regulators are making changes to rules and policy in response to this changing environment, while at the same time ensuring the objective of delivering lowest cost outcomes to consumers remains central. Key regulatory changes influencing distribution businesses have focussed on promoting efficient investment and supporting the transition of electricity sector at lowest cost. These have included regulatory changes to:• Drive greater market competition,

particularly in the emerging energy services market

• Support customer choice and putting them at the centre of decision making

• Unlock the multiple services/revenue streams of new technologies, especially distributed energy resources to benefit all in the supply chain

• Encourage distribution businesses to find lower cost solutions to investing in traditional network solutions

• Encourage research and development (R&D) to help distribution businesses discover new ways of using DM to keep the costs down for customers in the future.

In response distribution businesses are changing the way they are delivering their services to provide and operate a safe, affordable, secure and sustainable network at the lowest cost. For example, instead of investing in additional assets (such as building poles and wires), network businesses may contract third party providers to access distributed generation, storage devices or harness a greater range of DR.

Additionally the DM Plan supports the Queensland Government’s commitment to a 50 per cent renewable energy target by 2030.


5 Our DM Plan

5.1 OverviewOur DM Plan explains our approach to delivering the DM Program for Queensland. Table 4 presents those activities being delivered and funded through the DM Program budget and Demand Management Incentive

Allowance Mechanism (DMIAM) for 2019-20. Table 5 presents those activities contained in the Roadmap that we will support in 2019-20 by providing DM expertise. These activities relate to the DM Program,

but are being led by other teams. Table 6 outlines Department of Natural Resources Mines and Energy (DNRME) activities that we will support through project management and DM expertise.

Our Plan: What we will do

Our strategies

Our activities

Ensure efficient investment decision making

• Participate in newly introduced Demand Side Incentive Scheme (DMIS)

• Prepare annual DM Plan and respond to regulatory reviews

Incentivise customer efficiency

• Delivery of Broad based DM• Reward customers who enrol their

PeakSmart air conditioner• Reward customers who move their hot

water, pool pump or other loads to load control tariffs

• Business Load Control Opportunities• Develop capability, coverage and

efficiency of Targeted DM • Offer Target Area Incentives to

encourage demand reductions particularly in high growth areas

• Maintain Non-Network Alternative (NNA) generation contracts where it is cost-efficient to do so

• Support the Energex and Ergon Energy annual Summer Preparedness Plan

• Provide simple DM advice to customers• Network EV management

Active customer response enablers

• Develop network legacy load control strategy AFLC

• Undertake market scan and procurement of DR to complement AFLC

• Support development of DR Standards• Support growth in DM products and

solutions

Transforming supply at fringe of grid

• Develop a plan for delivering DM for SWER customers and undertake DM opportunities, in selected areas

Demand Management Innovation Allowance Mechanism (DMIAM)

• Undertake innovative trials and projects to test and validate DM products and solutions

Table 4: DM Plan overview

Our Future Grid Roadmap: activities that we will support

Our strategies

Our activities

Manage two way energy flows

• Roll out of targeted LV/MV state estimation capability, including DR and customer DER active management and interconnection to network devices

• Low Voltage Network Management Platform (LVNMP) specification and proof of concept

• Distribution Management System (DMS) Strategy and delivery


• Promote the benefits of tariff reform and DM opportunities

• Refine After Diversity Maximum Demand (ADMD) methodology for new subdivisions

• Improve Regulatory Investment Test Distribution (RIT-D) delivery strategy and NNA options tool

• EV interaction model

Active customer response enablers

• Establish Framework and Pilot DR Services to AEMO

Transforming supply at the fringe of grid

• Western Network Transformation Strategy and Opportunity Assessment

• Support Energy Queensland implementation of the AEMC Stand Alone Power System Rule Change Recommendations

Table 5: Energy Queensland activities that we will support in 2019-20

DNRME activities that we will support

Our strategies

Our activities


• Support customers by providing information to assist with tariff selection and implementation of best practice electricity strategies through DNMRE funded programs Large Customer Adjustment Trial (LCAT) and Large Customer Adjustment Program (LCAP)

Table 6: DNRME activities that we will support in 2019-20

CUSTOMER CHOICE AND CONTROL

LOWER BILLS FOR

VALUED SERVICESCLEAN ENERGY

TRANSITION

FAIR

NESS AND

INCENTIVES

SAFE, RELIABLE

AND SECURE

Cost efficient – working with end use

customers and industry partners to reduce peak

demand and improve network utilisation to

keep costs down

Customer centric – supporting end use customers in their

energy choices

Queensland renewable energy target – enabling

connection of distributed energy resources (DER)

to the grid

Improve safety, security and reliability –

by coordinating network and customer

resources to work together

Signalling the market – paying for DM

services where they deliver value

Fair and equitable – unlocking the value of demand

response for all end use customers, not just

those with distributed energy resources


5.2 Our PrinciplesOur six guiding principles, that underpin the DM Plan, are based on the Energy Network Transformation Roadmap (ENTR)3 balanced scorecard and are consistent with our Future Grid Roadmap. These principles have been used to prioritise our initiatives and activities. See figure 8.

3 ENTR is available on the ENA website https://www.energynetworks.com.au/electricity-network-transformation-roadmap

Figure 8: Our Principles. Adapted from diagram in ENTR final report.


5.3 Our strategies and activities As outlined above, Energex and Ergon Energy have developed the Roadmap, an overarching document which defines the activities and no-regret investments necessary for the Energex and Ergon Energy to achieve transition to the intelligent grid of the future over the next 10-20 years. The DM Plan, along with other plans, will facilitate delivery of the key elements of the Roadmap. The activities of the Roadmap are broadly grouped in five streams. To clearly show the linkage between the DM Plan and the Roadmap, the strategies of the DM Plan have been aligned to these streams.

Strategy 1: Ensure efficient investment decision makingAffordability remains a core concern for many customers. We heard from our customers that they want us to be prudent and efficient with our expenditure while maintaining the quality, reliability and safety of the network.

To ensure efficient, well planned investment and expenditure, we will continue to engage with energy service providers to seek DM solutions to reduce peak demand and defer the need to build more ‘poles and wires’. This approach will also enable us to leverage investment across the electricity supply chain.

Implementation of Demand Management Incentive Scheme

The Australian Energy Regulator (AER) recently introduced a Demand Management Incentive Scheme (DMIS) to encourage network businesses to seek efficient DM solutions when planning and managing the network. The scheme applies to Energex and Ergon Energy from 15 December 2018. Under the scheme, network businesses can receive incentives (i.e. qualify for additional revenue) of up to 50 per cent of costs of eligible DM projects.

We will participate in the DMIS and ensure our current DM activities are aligned with DMIS requirements.

Prepare DM Plan and respond to regulatory reviews

The Queensland Electricity Regulation requires Energex and Ergon Energy to submit an annual DM Plan in April each year.

We will prepare a DM Plan which sets out how we are working with our customers and industry partners to reduce demand to maintain system reliability in the short term and over the longer term to defer the need to build more ‘poles and wires’.

Numerous regulatory and policy changes are underway as part of the transformation occurring in the electricity sector. There are also regulatory obligations for reporting on our DM Program.

We will continue to provide accurate and timely reports as required and provide feedback on proposed regulatory changes based on our experience in delivering our DM Program.


Strategy 2: Incentivise customer efficiencyWe have heard from our customers and stakeholders that there is strong interest in collaborating with us on non-network alternatives. They expect us to collaborate with, and provide incentives to, customers and the supply chain to assist in DM delivery and uptake. Our customers also want more choice and control around their energy choices and simple, independent advice.

We will continue to provide incentives to customers through our Targeted and Broad based initiatives. Broad based initiatives differ from Targeted initiatives as they deliver demand reductions across the whole network, rather than in a local area. These reductions are factored into forward demand forecasts and therefore reduce network augmentation. These demand reductions can also be called upon during emergency or extreme peak demand events. Targeted initiatives are usually aimed at deferring augmentation of a specific asset (e.g. feeder, substation).

Broad based Initiatives Summer is the period of highest energy use in Queensland4. It is also the season that storms and cyclones are more likely. To maintain a reliable supply of electricity, Energex and Ergon Energy will continue to optimise their load control systems (LCS) and provide incentives to customers who enrol their PeakSmart air conditioners or connect their appliances to load control tariffs. These activities deliver DR that can be called upon during periods of extreme demand or emergency response, preventing area problems and network outages5.


We will continue to provide incentives to customers across Queensland who enrol their PeakSmart air conditioner.

Changes will be made to the business model to improve data quality on installs and increase uptake. These will deliver improvements to overall program efficiency.

Figure 9: Example of Ergon Energy incentive maps

4 AEMO Summer Readiness Report5 The Australian Energy Market Operator (AEMO) releases a summer readiness report to ensure reliability and security of the electricity network during peak demand

periods. If AEMO forecasts identify risks of supply falling short of demand in extreme but foreseeable conditions, they work with market participants, Commonwealth and State governments to secure sufficient resources to be summer-ready. Energex and Ergon Energy’s DR portfolio provides significant capability for AEMO to call on if required.

Control load tariffs

We will continue to incentivise customers to connect hot water, pool pump or other eligible appliances to control load (sometimes referred to off-peak, economy, Tariff 31 or Tariff 33) tariffs.

Business Load Control Opportunities

We will continue to address barriers to existing load control tariffs to broaden their appeal to more customers. These tariffs offer lower costs in return for network benefits of reduced demand during network peaks. Initially, this activity will apply only to agricultural customers connected to the Ergon Energy network. Learnings from this activity will inform the development of future tariffs for other customers across both networks.

Targeted InitiativesTarget Area Incentives

We will continue to offer incentives in areas with future constraints. These will typically be identified two to five years ahead to provide sufficient time



Refine ADMD methodology for new subdivisionsExisting ADMDs were derived from historical customer electricity usage. This methodology requires review as the growth in solar PV, batteries and EVs are changing customer consumption patterns.

Promote the benefits of tariff reform and DM opportunitiesWe will support tariff reform by informing customers of associated DM opportunities. This will allow customers to make more efficient decisions about their energy investments and energy use, leading to better utilisation of the network.

Improve Regulatory Investment Test Distribution (RIT-D) delivery strategy and NNA options toolImprove the internal tools, data and processes used for assessment of non-network alternatives to address network limitations.

EV interaction modelDevelopment of models to forecast how EVs will interact with the network, including consideration of tariffs.

DNRME activities that we will support

Large Customer Adjustment Trial (LCAT) and Large Customer Adjustment Program (LCAP)The focus of these programs is to identify energy and DM opportunities for these businesses and assist them to move to implementation of measures that reduce their demand and energy bills. Case studies will be developed of completed sites, to show case DM opportunities to wider industry.

for customers and industry partners to participate. Energex and Ergon Energy will publish incentive maps showing the location, incentive value ($/kVA) and timing of DR required (e.g. summer, 4-9 pm). Refer figure 9. For a full list of current Target Areas visit our websites:• Energex positive payback for

business incentives for south east Queensland

• Ergon Energy for available incentives in regional Queensland.

Non-Network Alternative (NNA) Generation Contracts

We will continue to manage existing NNA contracts where required. The majority of these contracts provide DR from customer generators when required. See Appendix A for the list of active contracts.

Other activities Summer Preparedness Plan

We will continue to support the Energex and Ergon Energy annual Summer Preparedness Plan. This plan details our actions for the summer season to provide Queensland with a reliable network so as to minimise interruptions during extreme weather conditions (refer to section 3.3 for more information).

DM advice

We will continue to provide simple and impartial advice to our customers and industry partners about how they can reduce demand on the network. Information will be provided through website content, videos and case studies. In the Ergon Energy network we also provide a helpline number 1300 550 766.

Network EV management

We will coordinate collaborative research into EV purchasing, charging behaviours and impacts. This will include identifying opportunities for EV management and engaging and educating on options.

Support activities

As part of this strategy, we will also support the activities listed below.

DNSP capacity

undercontrol

DNSP broad-based direct load control of hotwater, pools and air conditioners

Time

Dem

and

resp

onse

cap

acity

ava

ilabl

e

Regulation encourages DNSP to procure Demand Response (DR) from market

Third parties innovate technology control solutions

DNSP natural attrition of direct load control of appliances DNSP procuring more demand respsonse from the market

Third parties deploy to mass market Greater number of loads available for control

DNSP procures DR from market

Third parties deploy to ‘innovators and early adoptors’

DNSP AFLC load control

technology and market maturity

Third party capacity

undercontrol

Third party load under control matches and begins to exceed that of DNSP.

Successful transition without increasing risk to network.


Figure 10: Transition of demand response portfolio

Strategy 3: Active customer response enablersDirect control of customer loads has been enabled by AFLC in Queensland since the 1950s, however new options are emerging that will complement this legacy load control capability. There are now new technologies and systems that can provide more targeted control. In addition, regulatory changes are in place to encourage the network business to procure DR services from the market, rather than providing this themselves. Our customers expect us to help activate the DR market, whilst at the same time retain our legacy load under control.

We will procure DR from the market, where it is prudent and efficient, to complement our legacy load under control. It is anticipated that over time these services will make up a growing proportion of Energex and Ergon Energy’s DR portfolio. Refer to Figure 10. We will also develop our power, technology and digital platforms to enable our transition to an intelligent grid (refer to Our Future Grid Roadmap).

Develop network legacy load control strategy (AFLC)

This strategy will provide an overview of the unification of Energex and Ergon Energy’s Load Control System (LCS) and pathway for complementing existing load under control with DR from the market.

Undertake market scan and procurement of DR to complement AFLC

This activity will explore purchasing DR from the market in response to a network constraint. This will be delivered in conjunction with a DMIAM funded innovation project.

Support development of demand response Standards (AS/NZS 4755.2)

Energex and Ergon Energy have taken a lead role in advocating for DR Standards. The PeakSmart air-conditioning activity and recent battery trials are based on AS/NZS 4755 framework. This suite of Standards cover DR from multiple appliances including hot water systems, air conditioners, pool pumps, EVs and electrical energy storage systems. DR

Standards are key to enabling multiple appliances and manufacturers to participate in the future DR market.

A new standard AS/NZS4755.2 Performance Requirements for [Wireless] DR Systems is being developed by Standards Australia. This Standard will provide for alternative means to communicate DR modes (or operational instructions (OIs)) to appliances, without the need for a physical Demand Response Enabled Device (DRED). It is expected that this Standard will increase adoption of standardised DR by appliance manufacturers, aggregators and networks.

We will continue to input into the development of this new Standard through our active role on the working group.

Support growth in DM products and solutions

This activity will involve piloting new commercial models for securing market delivered DR solutions. In particular, we will investigate DR from DER, including batteries and EVs.


Strategy 4: Manage two way energy flowsOur customers expect us to facilitate the integration of renewables into our network. They expect us to continue the transition to an intelligent grid, enabling and leveraging the growth of DER – including grid-scale and small solar generators, and energy storage solutions. Our customers and communities want to be able to realise the many benefits of DER.

Reverse flows from widespread installation of distributed solar PV have resulted in emerging network impacts that must be managed. An Advanced Distribution Management System (ADMS) and an LV Network Management Platform (LVMP) are proposed as part of Our Future Grid Roadmap. These systems will provide greater network management at all levels of the network, but in particular low voltage (LV) network. They will also unlock opportunities for procuring DR from the market.

Support activities


Support activities



Establish Framework and Pilot DR Services to AEMOJoint initiative with AEMO to demonstrate the utilisation of DER to carry out distribution level optimisation for the National Electricity Market (NEM)


Roll out of targeted LV/MV state estimation capability, including DR and customer DER active management and interconnection to network devicesApplication of a proven state estimation technique (SEA) that generates an estimate of the networks’ operational conditions to the LV and MV network

Low Voltage Network Management Platform (LVNMP) specification and proof of conceptCommence development of a platform to capture low voltage network data utilising IoT devices to develop customer network constraints and share the data with other systems such as a Distributed Energy Resource Management System (DERMS) and an Advanced DMS (ADMS).

Distribution Management System (DMS) Strategy and deliveryThe DMS provides real-time status and control capability for the electricity network. This initiative involves implementation of a unified DMS to manage both Energex and Ergon Energy networks.


Strategy 5: Transforming supply at the fringe of gridMany of our customers in remote and rural areas of Queensland are serviced by Single Wire Earth Return (SWER) technology. We operate one of the largest SWER networks in the world with 65,000km of line. We will continue to support our remote and rural customers’ supply reliability through prudent investment. New technologies and customer choices are creating new opportunities in remote areas for the supply of electricity at reduced cost using non-traditional solutions. A range of options are being assessed for consideration in future planning studies.

DM for SWER customers This activity will develop a DM plan for SWER customers with a focus on Western Grid and undertake DM opportunities for selected customers chosen for alternative technology trials.

Support activities


Strategy 6: Support our program by investment in innovation (DMIAM)Our customers expect us to innovate and create a network that will support their future energy choices, whilst still delivering electricity safely, securely, affordably and sustainably. Customers also want us to support them save energy and shift demand in order to avoid building expensive new networks.

DM continues to be a primary consideration when optimising network investment. To support the transformation of our network to an intelligent grid we will continue undertake innovative trials and projects to test and validate DM products and processes. These trials will be supported by funding available under the Demand Management Innovation Allowance Mechanism (DMIAM) approved by the Australian Energy Regulator (AER). DMIAM projects have to meet strict criteria including the project being based on new technologies or concepts not implemented before in similar situations.

Table 7 presents a snapshot of the DMIAM funded innovation activities underway or proposed for 2019-20. Proposed activities are required to go through our innovation framework before getting approval to commence. Our DMIAM trials and projects will help develop our demand and energy management capabilities and will inform future DM activities.


Western Network Transformation Strategy and Opportunity AssessmentIdentify high cost to serve network areas in Western Queensland and seek non-traditional solutions, transition strategies and business models to enable customers access to a safe, secure, affordable, reliable and efficient electricity supply.

Stand Alone Power SystemsSupport Energy Queensland implementation of the AEMC Stand Alone Power System Rule Change Recommendations


DMIAM funded Innovation Activities in Market 2019-20

LeadFuture Grid Roadmap Stream

Scope

Alternative supply Bustard Heads

Ergon Transforming supply at fringe of grid.

Bustard Head site is a learning and enablement opportunity. The project replaces SWER grid with a Stand-alone power system as a lower cost initiative enabled by vegetation management.

Centralised Energy Storage

Ergon Managing two way energy flows.

To develop the integrated network control systems and to test and validate those control systems for utilising network connected large scale energy storage integrated with renewable energy systems.

Lakeland Solar Storage Ergon Transforming supply at fringe of grid.

To understand how large scale solar PV and battery storage can service fringe-of-grid regions, in particular around DM.

Solar Analytics – customer devices enabling renewables

Ergon Managing two way energy flows.

Explore the benefits and opportunities that smart customer side devices can deliver for both customers and the network. Focus areas for the project include; outage notifications for irrigators, PV export limits, DM in isolated communities and increasing LV visibility for the network.

Western Grid Testing and product development

Ergon Transforming supply at fringe of grid.

Laboratory trials of a number of devices with the potential to enable increased capacity and improvements to quality of supply for fringe of grid customers.

Battery energy storage system (BESS) pilot

Energex Active customer response enablers.

To better understand the impact of BESS on the network and how BESS can enable a higher penetration of solar PV.

Low voltage network power system static state estimation

Energex Managing two way energy flows.

To develop, implement and test an innovative state estimation algorithm for monitoring LV networks. This algorithm will form the basis for coordinating demand and distributed generation with respect to operational limits of local network segments.

Solar enablement Energex Managing two way energy flows.

Application of a proven state estimation technique that generates an estimate of the networks’ operational conditions to help assess the connection of additional customer photovoltaic (PV) systems to the MV network.

Evolve Energex and Ergon

Managing two way energy flows.

This project aims to increase the network hosting capacity of distributed energy resources (DER) by maximising their participation in energy, ancillary and network service markets, while ensuring the secure technical limits of the electricity networks are not breached.

Innovation Activities Proposed in 2019-20

LeadFuture Grid Roadmap Stream

Scope

Market scan and procurement of demand response from the market

Energex Active customer response enablers

Market scan and procurement of DR to deliver broad based residential load available for control when needed.

Targeted roll out of LV/MV state estimation capability

Energex Managing two way energy flows.

Harness the improved network visibility provided using State Estimation techniques by expanding their application across targeted areas of the LV/MV network with a particular focus on applying State Estimation in near real-time to better actively manage the network.

Establish Framework and Pilot DR Services to AEMO

Energex Active customer response enablers

Joint initiative with AEMO to demonstrate the utilisation of DER to carry out distribution level optimisation for the National Electricity Market (NEM).

Table 7: In market and planned innovation projects



InitiativeOperating

expenditure ($’000)

Capital expenditure

($’000)

Total expenditure

($’000)

Demand reduction

(MVA)

DM Program 7,300.8 1,112.7 8,413.4 39.6

DMIAM 1,000.0 0 1,000.0 n/a

InitiativeOperating

expenditure ($’000)

Capital expenditure

($’000)

Total expenditure

($’000)

Demand reduction

(MVA)

DM Program 5,166.0 0 5,166.0 32.2

DMIAM 1,000.0 0 1,000.0 n/a

Table 8: Energex Program direct costs (excludes overheads)

Table 9: Ergon Energy Program direct costs (excludes overheads)

6 Our Plan for 2019-20 The DM Plan for 2019-20 sets out how we will continue to work with our customers and industry partners over the coming year (refer Appendix B). Our plan is ultimately about reducing network costs through implementing effective and efficient DM activities. Appendix C details the DM activities to be delivered for each of our DM initiatives in 2019-20. We will build on our existing initiatives and deliver on our goal of providing a secure and reliable network. We will continue to listen to our customers and industry partners and continuously strive to innovate to future proof our DM Program.

6.1 Energex forecast expenditure and targetsThe forecast expenditure to implement Energex’s DM Program for 2019-20 is estimated at $8.41 million, as shown in Table 8. A demand reduction target of 39.6 MVA has been set for the year.

Future year MVA demand reductions may change year to year dependent on program focus and customer uptake of new technologies.

6.2 Ergon Energy forecast expenditure and targetsThe forecast expenditure to implement Ergon Energy’s DM Program for 2019-20 is estimated at $5.16 million, as shown in Table 9. A demand reduction target of 32.2 MVA has been set for

the year. Future year MVA demand reductions may change year to year dependent on program focus and customer uptake of new technologies.


Appendix A – Active Non network alternative (NNA) generation contractsEnergex and Ergon Energy have existing contracts with a customer or aggregator to provide non network alternative projects that provide network support and defer, avoid or complement network investment. These existing contracts are listed in Table 10. From 2020 onwards new contracts will be included in our Targeted Initiative.

Program Network DescriptionTarget (MVA)

Financial year contract ends

Stanage Bay Ergon Energy Network support for the Stanage Bay SWER during Christmas period enabling the deferral of augmentation.

0.03 2019-2020

Mt Isa Ergon Energy Network support for the Mt Isa network derived from customer and network embedded generators (Irish Club and airport)

1.74 2019-2020

Malanda Ergon Energy Customer embedded generator contracted to support the reduction of load in the Malanda area for network contingency requirements.

1.40 2019-2020

Barcaldine Ergon Energy Network embedded generator enabled to support the Barcaldine area during network outages.

20.00 2019-2020

Dingo/Duaringa Ergon Energy Network embedded generator in the Dingo/Duaringa area for supporting voltage and outages.

0.1 2020-2021

Bromelton Energex Contracted embedded generators for network support enabling the deferral of the Beaudesert Bulk Supply Substation

15.8 2020-2021

Total network support available for risk mitigation 39.07

Table 10: Active NNA contracts


Appendix B – DM activity by customer segment Table 11 provides a list of the activities to be delivered under the DM Plan and the applicable customers.

Our Activities

Customer segment

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Oversee implementation of Demand Side Incentive Scheme (DMIS) ● ● ● ● ●

Prepare annual DM Plan and respond to regulatory reviews ● ● ● ● ●

Delivery of Broad based DM- Incentives for PeakSmart air conditioning- Incentives for connection to load control tariffs- Business Load Control Opportunities

● ●

Targeted DM- Target Area incentives- Non network alternative generation contracts

● ● ● ● ●

Summer Preparedness Plan ● ● ● ● ●

DM advice ● ● ● ● ●

Network EV management ●

Legacy load control strategy ● ●

Market scan and procurement of DR ● ●

Demand response standards ● ● ● ● ●

Support growth in DM products and solutions ● ● ● ● ●

DM for SWER customers ● ● ●

Build capability and undertake innovative trials and projects (DMIAM) Project specific

Roadmap activities we support

Rollout of targeted LV/MV state estimation capability, DR and customer DER active management and interconnection to network devices ● ● ● ●

Low voltage network management platform specification and proof of concept ● ●

Distribution management system strategy and delivery ● ● ● ● ●

Promote the benefits of tariff reform and DM opportunities ● ● ● ● ●

Refine ADMD methodology for new subdivisions ●

Improve RITD delivery strategy and NNA options tool ● ● ● ● ●

EV interaction model ●

Pilot and establish DR for AEMO ● ● ● ● ●

Western Network Transformation Strategy and Opportunity Assessment ● ● ● ●

Support implementation of the AEMC Stand Alone Power System Rule Change ●

DNRME activities we support

Large Customer Adjustment Trial (LCAT) and Large Customer Adjustment Program (LCAP) ● ●

Table 11: Our activities and customers


Appendix C – Broad Based, Targeted and DM Development InitiativesTable 12 provides a list of the activities being delivered in 2019-20 under our Broad based, Targeted and DM development initiatives.

Our Activities(led by DM Team)

Network Description 2018-19 2019-20 2020-25

Broad Based Initiative


Energex and Ergon Energy

Provision of incentives to customers who enable their PeakSmart air conditioner.

Active Active Active

Load control tariffs Energex and Ergon Energy

Provision of incentives to customers for connecting appliances to load control tariffs


Business Load Control Opportunities

Ergon Energy (initially)

Address barriers to existing load control tariffs to broaden their appeal to more customers


DM advice Energex and Ergon Energy

Provide simple advice to customers on how to reduce demand.


Summer preparedness plan


Support the Energex and Ergon Energy annual Summer Preparedness Plan


Targeted Initiative

Target area incentives Energex and Ergon Energy

Management of targeted incentives to defer, avoid or complement investment in the network. For a full list of current Target Areas visit our websites:• Energex positive payback for business

incentives for south east Queensland • Ergon Energy for available incentives in regional

Queensland


Non network alternative generation contracts


• Continue to manage existing NNA contracts where required.


DM Development Initiative

Network EV management


Coordinate collaborative research into EV purchasing, charging behaviours and impacts. This will include identifying opportunities for EV management and engaging and educating on options.

New

Oversee implementation of DMIS


Oversee the implementation of DMIS to ensure mandatory minimum project evaluation requirements are met.

New Active

Develop Network legacy load control strategy.


Develop strategy to integrate existing AFLC load control with modern DR solutions and systems

New Active

Support development of demand response standards


Support development of AS/NZS 4755.2 Active Active Active

Support growth in DM products and solutions


Pilot new commercial models for securing market delivered DR solutions and investigate opportunities for BESS and EVs to benefit the networks.

New Active

Prepare annual DM Plan and respond to regulatory reviews


Prepare and submit annual DM Plan and respond to regulatory changes and reporting requirements relating to DM.


DM for SWER customers

Ergon Energy This activity will develop a DM plan for SWER customers with a focus on Western Grid and undertake DM opportunities for selected customers chosen for alternative technology trials.

New Active


Support to other DM related Roadmap activities



Rollout of targeted LV/MV state estimation capability

Energex Application of a proven state estimation technique (SEA) that generates an estimate of the networks’ operational conditions to the LV and MV network

New Active Active

Low voltage network management platform specification and proof of concept


Commence development of a platform to capture low voltage network data utilising IoT devices to develop customer network constraints and share the data with other systems such as a Distributed Energy Resource Management System (DERMS) and an Advanced DMS (ADMS).

New Active

Distribution management system strategy and delivery


The DMS provides real-time status and management capability for the electricity network. This initiative involves implementation of a unified DMS to manage both Energex and Ergon networks.

New Active

Promote the benefits of tariff reform and DM opportunities


We will support tariff reform by informing customers of associated DM opportunities. Cost reflective tariffs are based on customers paying a price for network charges, which is more closely aligned to the cost to supply them. This will allow customers to make more efficient decisions about their energy investments and energy use, leading to better utilisation of the network.


Refine ADMD methodology for new subdivisions


Existing ADMDs were derived from historical customer electricity usage. This methodology requires review as the growth in solar PV, batteries and EVs are changing customer consumption patterns.

New

Improve RIT-D delivery strategy and NNA options tool


Improve the internal tools, data and processes used for assessment of non-network alternatives to address network limitations

New Active

EV interaction model Energex and Ergon Energy

Development of models to forecast how EVs will interact with the network, including consideration of tariffs

New

Establish Framework and Pilot DR Services to AEMO


Joint initiative with AEMO to demonstrate the utilisation of DER to carry out distribution level optimisation for the National Electricity Market (NEM)

New Active Active

Western Network Transformation Strategy and Opportunity Assessment

Ergon Energy Identify high cost to serve network areas in Western Queensland and seek non-traditional solutions, transition strategies and business models to enable customers’ access to a safe, secure, affordable, reliable and efficient electricity supply.

New Active

Stand Alone Power Systems

Ergon Energy Support Energy Queensland implementation of the AEMC Stand Alone Power System Rule Change Recommendation

New

Support to DNRME activities



Large Customer Adjustment Trial (LCAT) and Large Customer Adjustment Program (LCAP)

Ergon Energy The focus of these programs is to identify energy and DM opportunities for these businesses and assist them to move to implementation of measure that reduce their demand and energy bills. Case studies will be developed of completed sites, to show case DM opportunities to wider industry

Active Active

Table 12: Initiatives and activities being delivered in 2019-20


Appendix D – Network Characteristics

Energex – Network CharacteristicsThe Energex network area has a relatively high population density and the network has developed to be highly meshed. This means electricity can potentially be delivered to a customer through multiple paths. This allows for improved reliability of supply and sharing loads to minimise the need for costly network augmentation.

Direct load control of customer appliances is enabled by the Load Control System (LCS). This legacy LCS relies on manual schedule uploads and dedicated hardware. It is a mature system, built up over decades, which is able to broadcast signals across the network. While it can’t target individual premises

it is fast and reliable, realising DR in seconds. The LCS sends a load control schedule to controllers located in zone sub-stations. The schedule specifies the DR required (e.g. on/off for hot water systems and pool pumps or reduced consumption for air-conditioners) and duration. Audio Frequency Load Control (AFLC) units located in each zone sub-station then inject coded AFLC signals over the powerlines to all downstream connected homes and businesses. The AFLC signal is received by controlled appliances (e.g. hot water systems on a load control relay, air conditioners with a PeakSmart signal receiver installed) which then respond. Refer to figure 11.

Ergon Energy – Network CharacteristicsRegional Queensland has urbanised areas concentrated around regional centres, as well as, vast expanses of sparsely populated areas. Consequently, Ergon Energy’s network is radial network (hub and spoke). This design limits the number of pathways available to deliver electricity to a customer and hence reliability of supply and the ability to share loads is reduced. Ergon Energy’s network also includes over 65,000km of single-wire, earth return (SWER) network supplying 25,202 customers in remote areas. There are also 33 isolated networks (not grid connected) that have their own generation.

Ergon Energy also manages customer appliances using direct load control. Like the Energex LCS, Ergon Energy’s is a mature system that can broadcast signals across the network. It too is fast and reliable. However, control is based on a dynamic control algorithm rather than an everyday schedule. Ergon Energy also uses AFLC as the communication protocol, but, unlike Energex there are six ALFC communications protocols. This means that relays and PeakSmart signal receivers have to be programmed to receive different AFLC signals in different parts of the network. Another difference is that AFLC signals are injected at network bulk supply points which control groups of zone substations.Figure 11: Energex load control system


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2019-20 Demand Management Plan - Energex · 2 Demand Management Plan 2019-20 Definitions, abbreviations and acronyms 50 POE 50% Probability of Exceedance (Peak load forecast based