Tariff and Demand Charge Optimisation
Smart Control. Stable Operations. Cheaper Energy.
Wholesale market flexibility is one half of Integrated Industrial Energy Control. The other does not depend on spot price volatility at all. Retail electricity tariffs are structured around maximum demand, and for many sites the demand charge component of the bill is a larger and more predictable cost than wholesale exposure. Managing that charge, and evaluating retail offers on a like for like basis, is a separate but related capability built on the same underlying plant model.
What this covers
The simulation engine behind the wholesale market work models plant load at five minute resolution against real market data. The same model can be run against a retail tariff structure instead, to answer a different set of questions.
- What would this site’s maximum demand charge be under a proposed retail offer, based on actual historical load rather than an estimate.
- How would a change in plant operation, or a battery or generation asset, change that demand charge outcome.
- How do two or more retail offers compare once demand charges, time of use rates, and network charges are all accounted for, rather than comparing headline rates alone.
- What happens to the site’s cost position if a network operator or retailer introduces a maximum demand charge on feed in tariffs, which several are signalling as a future direction.
- If site electrical supply is constrained, whether by network capacity or by an embedded generation limit, how the plant can operate within that constraint while minimising cost impact.
Why this matters independently of wholesale volatility
Wholesale spot price volatility has compressed in parts of the National Electricity Market as battery storage has taken on more of the price setting role. That is a reasonable trend to expect to continue in some regions. Retail tariff structure and maximum demand charges are a separate cost lever that exists regardless of how volatile the wholesale market is in a given quarter, and retailers and network operators continue to adjust tariff structures over time. A site with flexible load benefits from having both levers quantified, not just one.
Who this suits
This suits sites currently negotiating or renewing a retail electricity contract, sites facing a network imposed maximum demand limit or an embedded generation constraint, and sites wanting to understand their cost exposure ahead of anticipated tariff structure changes, in addition to sites already considering wholesale market flexibility.
Where to from here
This work draws on the same plant assessment used for wholesale market flexibility, so the two can be scoped together or separately depending on what your site needs first.