A pioneering trial is underway to explore how flexible energy management can assist households in tackling the complexities associated with energy resources. The Australian Renewable Energy Agency (ARENA) has pledged $6.2 million towards the $13.8 million Energy Masters project, which was introduced in May 2024 together with the South Australian Government.
The Energy Masters initiative aims to implement smart and adaptable energy management systems in 500 households across South Australia. This will be the first demonstration in Australia that aggregates flexible energy demand within residential environments, relying on a home energy management system (HEMS).
Challenges of Consumer Energy Resources
As homeowners increasingly shift towards electrification of their homes and transportation, it’s anticipated that the demand on the electricity distribution network may double by 2050. Additionally, integrating more renewable sources into the electricity grid poses challenges for traditional energy generation, distribution, and storage methods.
Consumer energy resources (CERs), which encompass any consumer-owned assets that generate or store electricity—including rooftop solar panels, batteries, and electric vehicles—are expected to be instrumental in the transition to a more sustainable energy landscape. A report from the Energy Security Board highlighted that the next ten years present a significant opportunity for Australia to leverage CERs in decarbonising its energy systems, ensuring a reliable energy supply while keeping costs down.
Leading the Way in Renewable Energy
South Australia is at the forefront of renewable energy adoption globally. According to ElectraNet, the state’s transmission operator, wind and solar energy constituted 75 per cent of local energy supply over the previous year, ranking it as the highest globally. With the state’s ambitious goals of achieving 100 per cent net renewable energy by 2027 and net zero emissions by 2050, considerable investment in new renewable technologies will be essential.
The Energy Masters trial is aimed at minimising the need for additional generation, network, and storage capacity, which, in turn, will help keep consumer costs low. The project starts with 500 households and plans to illustrate the advantages of collaboration between consumers and the energy sector in promoting demand flexibility and smart homes.
Key Components of the Trial
Several components will underpin the pilot project, including:
- The installation of HEMS and energy-efficient appliances supported by specific subsidies.
- The development and testing of innovative retail energy offers and demand flexibility technologies.
- An 18-month research initiative focused on technical, policy, and behavioural challenges and opportunities.
- Utilising insights garnered from the trial to help craft interoperability standards aimed at future scaling and nationwide adoption of two-way demand flexibility.
Households involved will receive subsidies for smart air-conditioners, heat pump water heaters, and smart electric vehicle chargers, along with a HEMS to optimise their energy consumption. In exchange, participants will engage in research to showcase the benefits of energy-efficient residences and provide a straightforward method for South Australians to take control of their energy use.
Understanding Demand Flexibility
The Australian Energy Market Operator (AEMO) anticipates that regions within the National Electricity Market (NEM) and the Wholesale Electricity Market (WEM) will face operational demands exceeding voltage thresholds over the next five years. ARENA has identified the integration of flexible demand as essential to Australia’s renewable energy transition.
Demand flexibility refers to the ability of energy consumers to modify their electricity usage depending on availability and cost. It can help reduce overall electricity expenses by enabling consumers to use less energy during peak pricing and discharge their CERs when demand surges.
Expanding Flexible Demand Initiatives
ARENA’s report titled “The Role of Flexible Demand in Australia’s Energy Future” outlines strategies to enhance the adoption of flexible demand throughout Australia. Key strategies include demonstrating the electricity system’s value from flexible demand and showcasing the technical feasibility of novel flexible options.
Darren Miller, CEO of ARENA, noted that the Energy Masters project represents an opportunity to illustrate the benefits of flexible demand for households in a renewable energy-dominated market. He stated, “South Australia has been a leader in variable renewable energy penetration, making it an ideal location to test how adaptable energy usage can support high levels of renewable generation.”
The Benefits of Home Energy Management Systems
A pivotal aspect of the Energy Masters trial is the implementation of HEMS, which blends software and hardware to oversee and manage energy consumption, typically via a mobile app or online platform. Such systems allow users to manage their energy needs effectively, offering features such as remote appliance control and timely notifications on energy usage.
HEMS are designed to enhance energy and cost savings, allowing consumers to utilise energy at the most economical rates. With the ability to manage appliances such as solar systems, air-conditioning units, and electric vehicles, HEMS enable more flexible energy consumption. Integrating these systems with platforms like Google Home and Alexa further simplifies energy management for users.
Collaborative Efforts and Future Participation
The South Australian Government is collaborating with SA Power Networks to recruit households for the trial. The initiative will prioritise engagement with low-income and energy-vulnerable populations, providing higher subsidies for their inclusion.
SA Power Networks will contribute $2.8 million to the project, which seeks to unite industry stakeholders, including ARENA, energy retailers, and technology leaders, to maximise the programme’s impact.
Households that choose to participate will also contribute to a research program, guided by RACE for 2030, to evaluate the advantages of energy-efficient homes and inform future interoperability standards on a national scale.
Expressions of interest for the Energy Masters trial will commence in the latter half of 2024, with the programme expected to continue until 2027.