Demand Resonse for All

What is peak energy use and why does it matter?

Peak energy use can occur when a significant number of electrical devices are turned on at the same time (such as motors, pumps, air conditioning or fork lifts). To allow for these times of high usage, an energy retailer may bill you a demand charge.

Demand charges are based on the highest amount of electricity you use during the billing period, usually in 30 minute intervals. They reflect the fact that energy suppliers need to have a lot of infrastructure standing by, to ensure they can meet the maximum energy demand that could be placed on the network by users.

Using a water pipe as an analogy, energy charges (measured in kilowatt hours – kWh) are for the amount of water that comes through the pipe; while demand charges (measured in kilovolt amps – kVA), pay for the width of the pipe.

Previously, most energy retailers billed businesses based on energy charges, plus a service fee. Now, many energy retailers are billing businesses for a smaller energy charge, a demand charge, and a service fee.

If your bill includes a demand charge, you could pay more for electricity if you don’t use the network efficiently

Electricity demand charges have typically been calculated on real power. But this is only part of the load placed on network infrastructure. Real power is the electricity that makes everything run on your site. Reactive power is electricity that your electronic devices and machinery ‘suck up’ but do not turn into useful output.

As a result, some electricity retailers now calculate demand charges on the amount of capacity required to support your business – a combination of the real power and reactive power you use. This measurement is called apparent power and is measured in kVA.

So, if your business is using a lot of reactive power, you could be paying higher demand charges than you need to. The good news is, by reducing your reactive power demand from the grid, it is possible to reduce the demand charge component of your electricity bill.

This is where power factor correction comes in

One way to reduce reactive power usage is through power factor correction. Power factor refers to the ratio of real power to reactive power. The higher the reactive power demand relative to your demand for real power, the poorer the power factor.

Poor power factor means that a higher kVA is required to deliver a given kWh, leading to increased demand charges. Other negative effects of poor power factor include increased energy losses in cables, transformers, and switchboards and the potential for the overload and overheating of electrical infrastructure and equipment.

Power factor correction (PFC) equipment reduces the amount of reactive power supplied by the grid, which in turn reduces your demand charges.

Should I choose power factor correction or energy efficient equipment upgrades?

Power factor correction and energy efficiency equipment upgrades go hand-in-hand. Going back to the water pipe analogy, power factor correction can reduce the width of the water pipe (kVA), but doesn’t reduce the amount of water (energy) you need to get the work done (kWh). Energy efficient equipment will reduce the amount of energy (kWh) you use.

Some equipment (like motors and compressors) has a comparatively low power factor because of the way it works. This means some sites will always benefit from power factor correction, no matter how efficient the equipment is. And that’s why you need expert advice to figure out the best solution for your business.


The Grid Footprint is a good measure of both Security and Savings. Reducing the size of the footprint to zero is equivalent to going off-grid.

The grid footprint evaluation is relevant to reducing costs by having the flexibility to manage customer loads and move charges away from the peak times.

RE generation

The 100 kW of solar is working well and is only exporting occasionally during winter. In order to increase the solar it will be necessary to manage loads so that the excess solar can be directed to storage rather than be wasted back into the grid. The current system, which uses Delta inverters, does not appear to be set so that it helps the current power factor problems. It would normally be set 0.9 lagging which would have a significant Positive Impact on the overall power factor when the sun is shining. Although no further solar is recommended at this stage, when other recommendations are in place, then it will be possible to even double or triple the amount of solar that can be used. This needs to be kept under the maximum total load during winter assuming that cooling can be done mainly in solar hours. This will not be an issue during vintage when all the solar would be utilised.


Supporting Solarcitizens 

Embedded networks are ideal for demand response and a head meter can be the point at which energy savings are made by reducing peak demand across the complex and allowing sub meters to be billed at flatrate tariffs.

Load controls across the whole complex can be used to reduce the peak 30min interval at the head meter.​

Demand response has the potential to help transform Australia to 100% renewable energy at lower cost than current methods. 

Demand management allows owners to manage their energy resources in a decentralised grid.

The Govt. can offer up to $1000/kVA  for peak reduction and still be cheaper than building new centralised power stations.

Demand Response supports solar projects with innovative technology and solutions for the generation, distribution and equitable sharing of power. 

Demand Response

Simple and automated services allows rewards for brief periods of demand reduction.

AEMO and governments are implementing a range of measures to address this demand, including seeking assurance that generators have sufficient fuel and are available to run. AEMO will pilot a new demand response market with VRE generators that are able to respond appropriately and predictably to power system disturbances.

Peak demand response: Under the Reliability and Emergency Reserve Trader provisions, AEMO is offering incentives to use embedded generation, such as diesel and gas-fired generators connected at industrial premises for Activating demand-side resources needs consumers who trust the market and expect it to work in their favour, so that they are willing to engage with retailers and the emerging energy services sector.

The uptake of new technologies is putting consumers at the centre of the electricity market. DER, energy efficiency improvements, and demand response actions can all be harnessed to improve the energy supply costs.

Power Quality

It is recommended that power factor correction is installed in addition voltage optimisation was considered that the results of the monitoring showed that this would not achieve reasonable savings as the voltage does not go near the limit of the inverter tripping out at 253 volts.

New technological approaches such as innovative protection and control systems, will be required to address issues around low fault currents in a higher non-synchronous system.

South Australia is at the forefront of managing the impacts of a high penetration of VRE generation. Among these new measures is a requirement for active power control facilities to be fitted to all VRE generators. This measure is understood to require VRE generators to control their rate of change of active power (ramp rates), among other things.


Investments in improved energy efficiency can be expensive, but falling costs and payback periods mean that an increasing number of consumers are making these investments. Consumers are unlikely to invest in energy efficiency and demand management due to high upfront costs and imprecise benefits.

Load Backup

The cost of generating electricity at a gas price of $9/GJ is estimated to be in the range of $60/MWh to $140/MWh depending on the efficiency of the plant. This does not include any other costs.

However generators run less often and seek to capture periodic price spikes. In operating as peaking generators, these generators need substantially higher prices in order to recover their fixed costs over a lower utilisation rate generators will increasingly need to switch in and out of service, or ramp up and down while operating, depending on intermittent supply from wind and solar generation. This volatility means less predictability and more starts for generators, resulting in higher costs.

Electrical Storage

It is too expensive to start using batteries in industrial applications where huge amounts of cooling and motors are used extensively. However, it is appropriate to start using these batteries to provide synthetic inertia which will be able to help balance the grid both across phases and disturbances in the grid system it is therefore recommended that 50 kW of batteries be made available initially as a load bank for the generator as the generators will need to have a minimum load to operate efficiently

Thermal Storage

Thermal storage is a underutilized resource for integrating renewable energy into a secure and reliable microgrid the motor grid is able to give greater grid independence by the use of variable renewable energy resources. The Refrigeration Battery thermal energy store enables businesses with refrigeration to freeze gel packs which are stacked in an insulated corner between the freezer and the cool room or anteroom and then recover the stored energy after the sun goes down.

The Refrigeration Battery can also use off-peak power to produce and store energy overnight for use by the cool room during the morning. Refrigeration running cost savings of over 50% can be achieved under dynamic peak pricing tariffs. Demand response incentives via demand tariffs are becoming common.

The Refrigeration Battery unit creates and stores cooling energy by freezing PCM (phase change material) in an insulated storage bank. It cools by circulating chilled air from the freezer and later discharges by circulating chilled air to the cool room taking load off the refrigeration racks.

The Refrigeration Battery reduces the load of the energy-intensive compressor during peak daytime hours. During off-peak hours, the conventional HVAC system operates as usual. Together, this unique hybrid system surpasses the overall efficiency and performance of conventional equipment alone.

Key benefits

  • Reduces peak demand
  • Increased use of Solar PV
  • Operates automatically
  • Maximizes energy savings
  • Qualifies for green loans
  • Improves solar PV payback
  • Qualifies as a RE resource

Key features

  • High Reliability 20 year design life for phase change material with low maintenance
  • Extends compressor life by eliminating stop-start operation
  • Suitable for most types of commercial refrigeration equipment.

Easy Installation

  • Can be a DIY installed or by an certified local HVAC contractor
  • Controller programmed for automated operation via inverter
  • Retrofits to existing A/C pipework.

The federal government through AEMO is giving incentives to customers to reduce load to avoid blackouts as an alternative to building new fossil fuel baseload stations.

These incentives can be used for customers to get the right management of their energy loads which leads to lower electricity costs. It covers the capital cost of putting in equipment to respond to demand signals as well as paying customers to respond to peak demand management. 

Thermal Storage

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