Water utilities can play a critical role in providing electricity system security

During Australia’s recent bushfire crisis, water utilities participating in demand response played an important role in maintaining the security and stability of the energy system. 

There are four types of demand response: emergency, ancillary services, network and wholesale. Businesses that use demand response programs range from water corporations to agribusiness, hospitals, shopping centres and industrial manufacturers.

Businesses participate via a third-party aggregator, which supplies their combined energy load to the Australian Energy Market Operator (AEMO) when called on in response to a grid need. 

In Victoria, there were multiple, significant grid requirements from December 2019 to February 2020. During these events, the majority of the state’s water corporations provided demand response support to the grid. The participation was strongly supported by the state government.  

A perfect storm

From 30 January to 1 February, AEMO called on two types of demand response – emergency and ancillary services via its Reliability and Emergency Reserve Trader (RERT) program and Frequency Control Ancillary Services (FCAS) – to support the grid each day. 

This was due to a combination of extreme weather and the fragility of transmission lines and network supply assets, particularly after bushfires, heat, smoke and damaging winds and storms.

Of Victoria’s 19 water corporations, 11 are enrolled in the RERT program with Enel X, including Central Highlands Water, City West Water, Coliban Water, East Gippsland Water, Lower Murray Water, Melbourne Water, South Gippsland Water, Wannon Water, Western Water, Westernport Water and Yarra Valley Water.

Using existing assets and processes, the water businesses could harness their inherent power flexibility to reduce demand during peak periods. They did this by activating backup generation or curtailing the energy used by key processes, such as pumps, for up to four hours. 

On 31 January, storms damaged six transmission towers in western Victoria, causing a trip to the main interconnector transmission line between Victoria and South Australia. This caused the grid’s frequency to drop. FCAS providers were called on by AEMO to immediately stabilise the frequency and avoid widespread blackouts. 

Large parts of Victoria and New South Wales (NSW), which were already facing bushfire conditions, also experienced extreme temperatures that caused price spikes during the late afternoon and evening peak demand period. 

Over three days, commercial and industrial businesses also powered down for up to four hours via RERT. Enel X’s aggregated capacity provided 30 MW to the grid, including the flexible demand of the water corporations. This helped to reduce the length and severity of the emergency when the grid was under threat.

The water corporations who participated provided an immensely important service to the grid. Participation also aligns with the long-term strategy of many businesses to achieve carbon emission reductions and facilitate the adoption of low carbon energy sources. 

Other recent events

At the end of December 2019, temperatures over 30 and 40 degrees put immense pressure on the grid. This was exacerbated by bushfires, particularly in eastern Victoria, where there was unavailability of large generating units at Loy Yang, as well as softening availability from wind and solar farms during the peak evening period.

When the main transmission line between Victoria and NSW tripped due to the bushfires, the result was substantial loss of supply in Victoria. AEMO issued a ‘Lack of Reserve Level 2’ notice to the market. 

While demand response capacity was impacted by bushfires, as well as operational constraints given the time of year, a significant number of sites were able to respond to AEMO’s RERT activation, by powering down as much load as possible from 6pm–9pm on 30 December. 

On 4 January the transmission line trip caused a separation event between NSW and Queensland and the rest of the NEM. As a result, the grid’s frequency rapidly dropped in both states. 

Enel X participated in three FCAS events when the grid’s frequency dropped below its normal operating band. Water corporations and other businesses curtailed load in response, helping to return the grid to its normal operating range. This also helped prevent generators tripping as a result of dangerously low frequency. 

Supporting Australia’s electricity grid

Across all events, a combination of water utilities, cold storage facilities, data centres and industrial gas processors helped to provide crucial demand response, taking some pressure off the generators, which were operating at an elevated output as they struggled to meet demand. 

At the participating water utilities, much work was done before summer to update operating procedures to ensure the highest level of readiness. There was a focus on shutdown and recovery procedures, as well as contingency plans for water flow management. Operational capabilities allowed many sites to support the grid while avoiding any impact to core deliverables of water supply and treatment. 

The water sector is unique as it has a high level of inherent power flexibility. Managing flows of water and treatment requires a strong base of engineering capabilities, which is why the sector was able to respond so quickly to provide critical grid support.

Rando Yam is Manager, Flexibility Operations and Zac Hardie is Program Manager, Flexibility Operations at Enel X Australia & New Zealand.