Consumption of electricity in Australia is projected to grow strongly over the coming decades, driven by both economic and population growth. The electricity supply infrastructure must accommodate high growth at the same time as replacing assets that have reached the end of their useful lives. A large part of the generation, transmission and distribution capacity will only be used for a small part of the year, coinciding with the coldest and the hottest days, when demand on the system is at its maximum. As these periods are of relatively brief duration (hours or at most days) the full capacity of the system is under-utilised. Peak demand is growing more rapidly than energy use, indicating that the economic efficiency of electricity infrastructure is falling.

Householder interest in reducing peak load is expected to increase as smart metering is rolled out and users become sensitised to time of use pricing (possibly assisted by in-home price displays). However, unless a smart appliance infrastructure is established to allow customers to set key appliances to respond automatically to dynamic electricity prices, current investment in smart meter technology will not achieve significant levels of demand response (DR).

Demand response interfaces on appliances that draw the largest loads, will allow utilities to directly manage their peak loads, reducing the risk of blackouts and delaying the immediate need to build new power generation infrastructure to cope with future demand. The value of direct load control will only be realised if there is a complete communications pathway to the appliance. The DR interface on the appliance is a critical part of this pathway and can be included at the manufacturing stage at minimal cost.

Mandating that appliances be built with DR interfaces would generate a ‘public good’ because they benefit all electricity users even if only a proportion of homes utilise the interfaces. Preliminary calculations indicate that mandating the interface would be nationally cost-effective even if only 5% to 10% of air conditioner owners chose to participate in utility DR programs.

So far, E3 has sponsored the development of a Demand Response standard by Standards Australia for air conditioners. This specifies a set of three simple instructions to which air conditioners complying with the standard must be able to respond, and an interface which can be simply and cheaply accessed by the energy utility. The costs will be low if the interfaces are built in to all new appliances.
Some minor modification of the air conditioner DR standard is required, mainly to correct inconsistency with other standards. Development of Standards is also in train to specify such DR interfaces for three further high electricity usage products, specifically swimming pool pump, hot water heater and electric vehicle battery chargers.

There is considerable interest internationally in the work being undertaken in Australia on these “smart appliance” standards. In particular, it has been proposed that the Australian DR standard be put forward as an International IEC standard. Also APEC has approved a project for Australia to run a workshop with APEC economies on DR standards work.