Market Update | 20 October

• The PDRS Second Rule Change consultation was released today
• LGC Spot continues to soften

In wider news this week, the release of a consultation for the next year of New South Wales’ Peak Demand Reduction Scheme (PDRS) has seen a welcome introduction of new activities. The consultation has been highly anticipated due to the potential for the introduction of residential batteries, and a method to recognise Wholesale Demand Response – both of which have been proposed. The full summary of the consultation is below:

Proposed changes to the PDRS:  

• Improvements to the pool pump activity to increase viability
  • The method has been simplified to remove the pool volume as a calculation.
    input, and instead use the projected annual energy consumption and daily run time values from the GEMS Registry.
  • The adjustment factors have been increased from 0.28 to 0.42.
  • The claiming period has been decreased from 12 years to 7 years.

• The heat pump hot water equation will be updated to add a capacity factor
  • A capacity factor will be added to the method to align it with ESC creation.
  • Notice has been given that any changes to heaps pumps under the ESS Rule, creating ESCs, will be mimicked under the PDRS.

• Addition of the requirement for demand response capability for HVAC1 and HVAC2
  • All installations of new high-efficiency air conditioners must have inbuilt demand response capabilities.

Proposed Additions to the PRDS:

• Wholesale Annual Response Mechanism (WARM)
  • This is an incentive for users with capacity participating in the Wholesale Demand Response Mechanism. Incentives are based on the amount of demand response capacity provided to the market over the summer period.
  • Peak Energy Reduction Certificates will be created annually based on actual capacity.
  • The WARM leverages the Wholesale Demand Response Mechanism (WDRM) to incentivise the availability of demand response capacity from large energy users in the form of Wholesale Demand Response Units (WDRU).

• Residential Batteries One: Install a new behind-the-meter residential battery energy storage system
  • Available to households where certificates are created based on an estimated load shifted by the battery outside of the peak period.
  • One-off certificate creation based on the lifetime of the battery.

• Residential Batteries Two: Sign a behind-the-meter residential battery energy storage system into a demand response contract  
  • PRCs will be created on an annual basis rather than as a ‘once-off’.

• Demand Response Residential HVAC: Sign a residential air conditioner into a demand response contract
  • Incentives are based on an estimate of the air conditioner load reduction when the set point temperature is increased.
  • PRCs will be created on an annual basis rather than a ‘once-off’.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.

Katie Tebbatt | Business Development Manager, Energy & Carbon Services
Katie specialises in Commercial Lighting (NSW, VIC & SA), Measurement & Verification, and energy certificates including LGCs & ACCUs.