Powering NSW’s Future: Beyond Coal and Gas

As we collectively move towards a greener future, the closure of coal-fired power stations is a shared consensus. The focus has shifted to gas-fuelled power stations, once considered transitional power sources during the shift to renewables, while batteries are emerging as a pivotal transitional technology. However, have we overlooked the potential of Demand Response?

During my tenure as the Demand Response Manager at AGL, we addressed the challenges posed by the retirement of the Liddel power station. A key component of our strategy was the implementation of a 90MW Demand Response program involving AGL's NSW customers. What became of that initiative?

Now, as the Eraring Power Station, responsible for supplying approximately 20% of NSW's power, faces closure by August 2025, it's crucial to reassess our energy landscape. Nuclear power and ambitious projects like Snowy 2.0 pose their own challenges, leaving us to question if they truly provide viable solutions.

Demand Response isn't a silver bullet, but it can certainly alleviate the risk. Encouragingly, the NSW Government has expanded its Peak Demand Reduction Scheme to include Demand Response. This means participants in the Australian Energy Market Operator’s Wholesale Demand Response Mechanism can qualify for PDRS payments, making participation more attractive.

Yet, the current participation in WDRM has its constraints, and companies must weigh the incentives against potential risks. Consequently, it prompts the question: Does the NSW Government need to explore alternatives that don't burden the state with administrative complexities and customer contracts?

Could a more robust Demand Response program by AEMO eliminate the need for state-run initiatives?

The adoption of the Retailer Reliability Obligation in July 2019 shifted the responsibility for balancing peak demand with appropriate sources of supply from AEMO to retailers. As we approach a future dominated by renewable energy, where we are depending on a reliable supply, should retailers not assure us of their capacity to weather peak demands?? Better still, should the retailers not dramatically scale up their use of Demand Response, particularly in NSW, to provide the insurance needed during peak demand?? Demand Response is far less expensive than batteries and pumped hydro storage schemes, far more valuable to the organisations that participate in Demand Response and far more flexible than other solutions to scale up or down.

It's time for a collaborative effort to explore sustainable solutions, balancing environmental concerns with the practicalities of energy management. Let's engage in a dialogue on reshaping our energy future.