Energy Networks & Demand Management

							                                                                Energy Networks
                                                          & Demand Management
                                   Electricity network businesses, through their direct connection to consumers, are in a unique
                                   position to identify and implement demand management opportunities providing the policy
                                   and regulatory frameworks do not act as barriers to investment in non-network options.
                                   What is Demand Management?
                                   Demand management from ENA’s perspective is defined as activities that seek to influence
                                   the patterns of energy consumption including the amount and rate of energy used, the
                                   timing of energy use and the source and location of energy supply.
                                   How does it work?
                                   There are a number of ways that energy demand can be influenced, either through direct
                                   actions by the customer or through actions by network businesses working with a customer
                                   or a group of customers. Demand management approaches and technologies include load
                                   management measures such as load-shifting technologies and direct load control. Other
                                   market based options involve the application of peak and demand tariffs with appropriate
                                   metering options, and the increased use of embedded generators sourcing renewable
                                   energy. These options can reduce overall energy demand, or shift energy use to different time
                                   periods or to alternative fuel sources.
                                   Demand management programs involve identifying customer energy demand reducing
                                   initiatives and assisting customer implementation of those initiatives through education,
                                   financial and other assistance. In general, network providers have found that demand
                                   management initiatives with short payback periods may be implemented by customers
                                   but that those with initiatives involving long pay back periods tend to be rejected. Any
                                   mechanism that assists customers with the implementation of initiatives, such as rebates
                                   or incentive payments, can significantly increase the successful implementation of demand
                                   management activity.
                                   Why is it important?
                                   The integration of demand management into mainstream energy supply and network
                                   planning can deliver positive outcomes for national energy policy. In particular, demand
                                   management can deliver benefits along the entire energy supply chain, not only deferring the
                                   need to build network infrastructure, but also reduce generation requirements, transmission
                                   investment, and potentially energy prices as well as a reduction in greenhouse gas emissions.
                                   What are the policy issues?
                                   Currently there are a number of barriers and impediments that need to be overcome before
Energy Networks Association
Address: Level 3,                  Australia realises the full benefits that are potentially obtainable from demand side options.
           40 Blackall Street      ENA believes positive action is needed to overcome these barriers to bring demand
           Barton ACT 2600         management on at least an equal footing to established infrastructure-based approaches
Phone:     02 6272 1555            to energy supply. A more balanced policy and regulatory approach could include the
Fax:       02 6272 1566            provision of positive incentives for demand management to assist in the development
Email:     info@ena.asn.au         of this industry, build expertise in Australia, and advance demand management as an
Website: www.ena.asn.au            alternative to network infrastructure options.

                                energy networks association                                                         February 2008