Is Demand Response right for your business?

Is Demand Response right for your business?
Is Demand Response right for your business?

SIMEC Energy Australia (SEA) is one of Australia’s leading and most experienced renewable energy companies and a growing energy retailer of electricity in the National Electricity Market (NEM). SEA provides energy solutions to a range of customers.

A key priority for SEA, is to deliver globally competitive energy prices to our customers through the creation of partnerships that deliver ‘win-win’ outcomes. We want to accomplish this by finding innovative and flexible solutions in delivering energy, managing energy costs and customer demand while reducing the impact to customers operations and their customers.

A component of this innovative package is the ability to harness demand-side response which can substantially improve energy costs for our business customers.  

To assess whether demand response (also known as demand management) is right for your business it’s worth clarifying what it is:  

  • A demand response contract with SEA would deliver economic rewards for changing energy consumption by either reducing or shutting down energy use processes.
  • Demand response can be achieved by voluntary load reduction or through the application of technology to automate the load reduction process while minimising the impact to operations for end users.    
    • The end goal is to reduce the total cost of your energy consumption.
    • To achieve this, we would work with you to ascertain the best solution to meet your specific business needs – which could involve switching energy use to on-site generation (e.g. a back-up generator) or by shifting high energy processes to different times of day.
  • SEA benefits from this type of demand response partnership through a reduction in wholesale market exposure – which is inherently volatile – and can help create more globally competitive pricing solutions.

Before electing to participate in a demand response program, SEA encourages you to get independent advice. This should be done before making any decision in relation to this, or any other, offer or opportunity presented by SEA or its affiliates. 

Demand response in more detail

Demand response involves changing how you consume energy.

With the added benefit, in this case, of being financially compensated for doing so - by us. 

By entering into a demand response contract with us, we would have an agreement which would give us the ability to change your energy consumption by either reducing or shutting down high energy use processes. This could involve switching them to on-site generation (e.g. a back-up generator) or by shifting high energy processes to different times of day.

This flexibility assists us in managing the total energy costs in our portfolio and creates economic value, which we would share with you.

How would it work with your business to deliver demand response?

Total energy demand in the National Electricity Market (NEM) fluctuates significantly over the course of the year. With the highest demand days typically occurring during summer as many consumers turn on air conditioners.

High demand days are also closely linked to higher energy prices – as more expensive forms of generation capacity are brought online to meet energy demand i.e. gas fired generation capacity. Retailers of electricity, such as SEA, continuously try to manage their exposure to the NEM wholesale market price volatility by executing a number of strategies including demand response.

As our customer we would pay you an annual fee to adhere to terms of a demand response contract with us. This contract would be individually designed and agreed in conjunction with you.  

Our Demand Response process works using the following steps:

We see this opportunity as a value sharing arrangement that would allow us to share the financial value that comes from a reduction in energy usage or demand.

We are also looking at demand optimisation opportunities, working with customers to flatten out peaky load profiles and ways to minimise energy consumption during traditional afternoon peaks.

How do you know if demand response is right for you?

If you have on-site energy storage or supply or have flexibility in how you can reduce your consumption, the SIMEC Energy Australia demand response opportunity may be a way you can reduce your energy costs.

To find out more information about our Demand Response solution and whether it may be right for your business, contact us at enquiries@simecenergy.com.au today.

Before electing to participate in a demand response program, SIMEC Energy Australia (SEA) encourages you to get independent advice. This should be done before making any decision in relation to this, or any other, offer or opportunity presented by SEA or its affiliates. 

Article published on Friday, 13 September 2019