How to use demand response at a commercial site
Summary answer
Start with the operating process, not a revenue forecast. A useful demand-response assessment identifies which equipment can change its electricity use, for how long, and under whose authority. This guide sets out the information and trial needed before relying on that flexibility.
1. Find the intervals that matter
Collect interval electricity data and the tariff attached to the site’s meter. Compare high-demand intervals with operating schedules: a production start, refrigeration cycle or charging period can have a different cause and a different remedy. Check whether the bill measures demand in kW or kVA and which time windows apply before assuming that moving a load will reduce charges.
2. Record each load’s operating limits
For each candidate load, record the allowable interruption, temperature or pressure range, minimum run time and recovery period. Identify the equipment owner and the person who can approve a trial. Critical safety and production functions should not depend on an assumed ability to override those limits.
Review the existing control interfaces and metering before choosing a communications design. A wireless connection does not by itself establish equipment compatibility, safe control or reliable measurement. Those questions belong in the site survey and controls review.
3. Measure the reduction and the recovery
Run a bounded trial with the site operator. Measure power before, during and after the event, together with the process condition being protected. A temporary reduction is not a battery capacity rating: duration, recovery energy and repeated-event limits all matter.
Check for a rebound peak when equipment restarts. Stagger recovery if the operating process permits it, and compare the whole event with an appropriate baseline rather than reporting only the lowest meter reading.
4. Separate bill savings from market participation
- 01Demand charge reduction. Holding flexible load out of the interval that would set the monthly peak.
- 02Wholesale price avoidance. Shifting consumption out of the intervals that price highest.
- 03Dispatch compensation. Payment for flexibility delivered into wholesale demand response and state schemes.
Bill savings depend on the tariff and retail contract; wholesale exposure is not automatic. Under the NEM wholesale demand response mechanism, a registered Demand Response Service Provider receives payment for dispatched response measured against a baseline. Eligibility, metering and commercial terms must be checked before including that income in a proposal. See AEMO’s explanation of the mechanism. For Vitalic’s service scope, see demand response management.
Frequently asked questions
What information is needed for a demand response assessment?
Start with interval electricity data, the current tariff and an equipment list. Add operating schedules, process limits and the person responsible for each load. Those inputs help distinguish an expensive interval from a load that can safely move.
Can every electrical load be included in a trial?
No. Equipment should only enter a trial after its operating limits, controls and authorisation are established. Exclude critical functions that cannot tolerate interruption, and agree an operator override before testing.
Why measure electricity use after the event?
Equipment may consume more power while recovering. That rebound can create another demand peak or offset some of the reduction. Measure the recovery period and the protected process condition as well as the event itself.
Does a successful trial guarantee market revenue?
No. Demonstrating flexibility does not establish market eligibility or commercial terms. Bill savings and paid dispatch are separate cases; confirm the applicable participation, baseline and metering arrangements before including revenue in a proposal.
Find out which of your loads are genuinely flexible.
Twelve months of interval data and your current tariff is enough to model dispatch against your real load.