In December 2018, the Council of Australian Governments (COAG) Energy Council Ministers, including the New Zealand Minister of Energy and Resources, agreed to investigate the case for certain electrical appliances to be demand response capable. The Government of South Australia is leading this project on behalf of the Equipment Energy Efficiency (E3) Programme.
Demand response provides an opportunity for consumers to play a significant role in the operation of the electricity grid by choosing to reduce, shift or flex their electricity use during periods of high demand or in response to other system-wide needs, typically in exchange for a payment.
A demand response capable appliance is able to receive a signal that turns it off or reduces its power setting. That signal can be sent remotely (e.g. via the internet or a wireless/mobile network) by the owner of the appliance itself or, if they agree, by another party on their behalf (this agent would require the owner’s consent and could only manage the appliances under agreed conditions).
In September 2019, an E3 consultation paper was released seeking views on whether all new heat pumps, electric hot water cylinders and electric vehicle chargers sold in New Zealand should be demand response capable. Feedback on the paper informed a Decision Regulatory Impact Statement to the COAG Energy Council in late 2019.
On 22 November 2019, the COAG Energy Council agreed to introduce demand response requirements for the above products in Australia. New Zealand decided not to adopt the requirements at this time, allowing further opportunity to consider non-regulatory mechanisms to address the issues (including market responses). If appropriate, New Zealand may revisit the Smart Appliances work in future.