Substitution involves changing the source of energy, for example switching from electricity to gas, or by using onsite generation or cogeneration to create capacity to provide part of, or all of your energy requirements.
Substitution requires investment in, and maintenance of, any onsite facilities and sourcing and storing the fuel to run them. If you require reliable energy there may not be any opportunity to shed load from the grid and substitute it for self-generated power.
Industry Case Study – Bankstown Sports Club – Demand Side Response
Bankstown Sports Club was approached by a demand side aggregator following pending network capacity problems in the local area. The Club entered an agreement to provide network support, using on site generation, because this was clearly preferable to facing loss of supply due to network outages.
The initial agreement included payment of a ‘standby’ fee and a ‘dispatch’ fee and extended for one summer period. The Club’s ‘standby’ generators were dispatched twice under this agreement.
The initial agreement was modified and extended to allow for dispatch by the demand side aggregator during periods of extreme high wholesale market spot prices. The terms and conditions of the modified agreement are similar to the initial agreement and require Bankstown Sports Club to offer ‘standby’ and ‘dispatch’ services (typically) during hot summer periods. The demand side aggregator installed and rigorously tested a remote, automatic start facility for the Club’s diesel generators. This allows the demand side aggregator to remotely dispatch the generators at very short (5 minute) notice during very short periods of extreme high spot price. However, Bankstown Sports Club retains control over the generators, which can be ‘locked out’, thereby preventing the remote start function, whenever this is required (e.g. for routine maintenance of the generator units or controls).
Bankstown Sports Club has yet to undertake a detailed analysis of the costs and benefits of the current arrangement, but it is clear that the overall benefits are reduced as the number of dispatch events and run time increases. Payments received must also be analysed against any increased maintenance or equipment replacement costs in the longer term.
Last year, we were paid the ‘standby fee’ through the whole summer and were only dispatched for one 5 hour period. But this summer, we received about the same ‘standby fee’ but were dispatched 5 times for a total of 48 hours, using up 4,000L of diesel fuel. Clearly, the returns in the first year are a lot more favourable than the returns this year.
- Steve Williams, Maintenance Manager, Bankstown Sports Club