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I-Hub Product Testing Evaluation Report: Flow Power - Electricity Spot Price Trading

Report


Type Of Work


  • Report

Abstract


  • The Warrigal Shell Cove residential Aged Care living laboratory is a modern facility constructed in 2017, with a large (99kWp) solar array and efficient HVAC system utilising heat recovery ventilation and VRF (variable refrigerant flow) heat pump systems with demand response capability. Evaluation of the baseline performance of the facility identified appropriate levels of thermal comfort, and high self-consumption rate for on-site generation. The clearest opportunity to improve the value of renewables in this i-Hub living laboratory was identified as time-shifting of HVAC loads to better align with renewable generation.

    There are many ways in which the operation of heating, ventilation and air-conditioning (HVAC) can be integrated with renewable generation, both on-site and off-site, in order to maximise the utilisation value of the renewable generation. However, this is an emerging technology and service area, and it is not currently clear what the most appropriate approach is for an aged care facility, with a need for high standards of thermal comfort. In identifying appropriate technologies for evaluation within this living laboratory, a balanced approach to risk and incentive was necessary.

    Demonstration of a market mechanism that could provide an attractive incentive for aged care facilities to implement active demand response controls was identified as a key enabling service. The following demand response markets were reviewed in consultation with a variety of service providers and intermediaries: the Reliability and Emergency Reserve Trader (RERT) market, the Wholesale Demand Response Mechanism (WDRM), Frequency Control and Ancillary Services (FCAS) markets and the Wholesale Spot Price Market. The wholesale market presented the most promising alignment with HVAC demand flexing capabilities to increase the value of renewable generation. The current technology evaluation report provides an evaluation of a retail electricity agreement that would enable the Warrigal facility to benefit from improved alignment between their loads and typical periods of renewable energy generation through direct exposure to the wholesale spot price market signals.

    Flow Power is an innovative energy retailer, offering customers direct exposure to wholesale electricity spot market. This demonstration project will consider Flow Power’s pure pass-through wholesale product, in which customers are directly charged the wholesale spot price each 5-minute interval, plus a margin. The wholesale spot price is influenced by the amount of renewable generation in the grid (as well as aggregate demand), and on a typical day will have minimum prices during periods of highest generation.

    The current evaluation has identified that during most months in the evaluation period (14 of 19), the Warrigal site would have lower energy costs under the wholesale pass-through. However in certain periods with more than the usual number of high price events, the Warrigal bill could be substantially larger than it would be under a traditional offering (up to 220% of the monthly energy cost). These high costs are typically caused by consumption during a small number of extremely high price events, where the wholesale price increased by several orders of magnitude. In the month with the highest estimated bill under the wholesale pass-through (Jan-20), 57% of the energy cost was caused by consumption during 5.5 hours with wholesale spot prices above $5,000/MWh, which is more than fifty times the average volume-weighted spot price in NSW of around $80/MWh. For comparison, the average fixed price for the existing supply contract was $104/MWh.

    Analysis of the energy consumption and temperature profile in the Warrigal living lab during these high price events indicates substantial opportunity for HVAC demand response to reduce electricity costs in these periods. This could take the form of simple scheduling of loads, utilisation of the latent demand response capacity within the existing AC units, or through advanced controls based on forecast wholesale spot pricing. A second technology evaluation is currently underway, in which the Flow Power pass-through offering is combined with active control of the HVAC system by a third-party technology provider based on forecast wholesale spot process. This would be expected to yield substantial cost savings for the living laboratory and demonstrate substantial benefits to the grid if implemented sector-wide.

Publication Date


  • 2021

Citation


  • Tibbs, M., Daly, D., Kokogiannakis, G., McDowell, C., Roth, J., & Cooper, P. (2021). I-Hub Product Testing Evaluation Report: Flow Power - Electricity Spot Price Trading. Wollongong, NSW, Australia: AIRAH. Retrieved from https://www.airah.org.au/

Web Of Science Accession Number


Place Of Publication


  • Wollongong, NSW, Australia

Type Of Work


  • Report

Abstract


  • The Warrigal Shell Cove residential Aged Care living laboratory is a modern facility constructed in 2017, with a large (99kWp) solar array and efficient HVAC system utilising heat recovery ventilation and VRF (variable refrigerant flow) heat pump systems with demand response capability. Evaluation of the baseline performance of the facility identified appropriate levels of thermal comfort, and high self-consumption rate for on-site generation. The clearest opportunity to improve the value of renewables in this i-Hub living laboratory was identified as time-shifting of HVAC loads to better align with renewable generation.

    There are many ways in which the operation of heating, ventilation and air-conditioning (HVAC) can be integrated with renewable generation, both on-site and off-site, in order to maximise the utilisation value of the renewable generation. However, this is an emerging technology and service area, and it is not currently clear what the most appropriate approach is for an aged care facility, with a need for high standards of thermal comfort. In identifying appropriate technologies for evaluation within this living laboratory, a balanced approach to risk and incentive was necessary.

    Demonstration of a market mechanism that could provide an attractive incentive for aged care facilities to implement active demand response controls was identified as a key enabling service. The following demand response markets were reviewed in consultation with a variety of service providers and intermediaries: the Reliability and Emergency Reserve Trader (RERT) market, the Wholesale Demand Response Mechanism (WDRM), Frequency Control and Ancillary Services (FCAS) markets and the Wholesale Spot Price Market. The wholesale market presented the most promising alignment with HVAC demand flexing capabilities to increase the value of renewable generation. The current technology evaluation report provides an evaluation of a retail electricity agreement that would enable the Warrigal facility to benefit from improved alignment between their loads and typical periods of renewable energy generation through direct exposure to the wholesale spot price market signals.

    Flow Power is an innovative energy retailer, offering customers direct exposure to wholesale electricity spot market. This demonstration project will consider Flow Power’s pure pass-through wholesale product, in which customers are directly charged the wholesale spot price each 5-minute interval, plus a margin. The wholesale spot price is influenced by the amount of renewable generation in the grid (as well as aggregate demand), and on a typical day will have minimum prices during periods of highest generation.

    The current evaluation has identified that during most months in the evaluation period (14 of 19), the Warrigal site would have lower energy costs under the wholesale pass-through. However in certain periods with more than the usual number of high price events, the Warrigal bill could be substantially larger than it would be under a traditional offering (up to 220% of the monthly energy cost). These high costs are typically caused by consumption during a small number of extremely high price events, where the wholesale price increased by several orders of magnitude. In the month with the highest estimated bill under the wholesale pass-through (Jan-20), 57% of the energy cost was caused by consumption during 5.5 hours with wholesale spot prices above $5,000/MWh, which is more than fifty times the average volume-weighted spot price in NSW of around $80/MWh. For comparison, the average fixed price for the existing supply contract was $104/MWh.

    Analysis of the energy consumption and temperature profile in the Warrigal living lab during these high price events indicates substantial opportunity for HVAC demand response to reduce electricity costs in these periods. This could take the form of simple scheduling of loads, utilisation of the latent demand response capacity within the existing AC units, or through advanced controls based on forecast wholesale spot pricing. A second technology evaluation is currently underway, in which the Flow Power pass-through offering is combined with active control of the HVAC system by a third-party technology provider based on forecast wholesale spot process. This would be expected to yield substantial cost savings for the living laboratory and demonstrate substantial benefits to the grid if implemented sector-wide.

Publication Date


  • 2021

Citation


  • Tibbs, M., Daly, D., Kokogiannakis, G., McDowell, C., Roth, J., & Cooper, P. (2021). I-Hub Product Testing Evaluation Report: Flow Power - Electricity Spot Price Trading. Wollongong, NSW, Australia: AIRAH. Retrieved from https://www.airah.org.au/

Web Of Science Accession Number


Place Of Publication


  • Wollongong, NSW, Australia