AGL clinches $864K ARENA funding for innovative grid solution

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Image credit: ARENA's Twitter

The Australian Renewable Energy Agency (ARENA) announced a grant of $864,000 to AGL to develop and trial a cutting-edge price intensity forecasting tool.

This initiative aims to support dynamic load flexing within the commercial and industrial sectors, fostering a smarter approach to energy consumption, the agency said in a news release.

The $1.78 million project, facilitated by AGL, is set to enlist the participation of four prominent Melbourne-based customer sites.

Leveraging their price intensity forecasts, AGL’s innovative tool aims to manage energy loads effectively, releasing approximately 25 MW of combined flexible load.

Participating in this project are Melbourne Airport, a leading warehouse and logistics company, a tier 1 supermarket chain, and a prominent water utility company.

These diverse sectors – cold stores, supermarkets, water treatment, and airport services – represent key areas for load management across the National Electricity Market (NEM), offering a potential load management capacity of 385 MW.

ARENA’s recent report, titled “The Role of Flexible Demand in Australia’s Energy Future,” underscores the importance of demand flexibility.

AGL’s project aligns with the report’s findings, addressing potential sources of demand flexibility through the development of new retail and commercial products, dynamic tariffs, and demand-based market hedges.

The project also explores electrification and control of commercial and industrial loads, including heat pumps, electric furnaces, and thermal storage for cold stores and commercial properties.

Shifting demand away from peak times and strategically reducing demand during critical periods aligns with broader energy storage goals and supports the integration of more renewables into the grid.

ARENA CEO Darren Miller emphasised the significance of flexible demand, stating,“Unlocking flexible demand at commercial and industrial sites can free up electricity capacity at times of high demand and consume electricity when renewable electricity is abundant. This will help us create a truly smart, adaptable and efficient energy grid.”

AGL’s tool, designed to forecast solar and wind generation, along with thermal generator availability, will produce 30-minute interval price forecasts for the upcoming week.

The customer sites will then plan their energy usage based on these forecasts, optimising load management. This innovative approach allows trial customers to respond to price signals and showcase the benefits of load flexibility without exposure to wholesale market risk.

Jo Egan, AGL chief customer officer, highlighted the project’s potential impact on energy pricing and the benefits of load flexing.

“Flexible demand projects like this enable AGL to develop our technological expertise in harnessing renewable energy while also exploring novel ways to reduce customer costs,” Egan said.

The two-year project, set to commence in early 2024, will witness the development of the price intensity forecasting tool’s software and hardware, with findings expected to be shared by mid-2025.