Organisations are shifting the way they buy power and are entering into corporate renewable PPAs to achieve cost savings and reduce long term risk, but this also brings exposure to some new risks.

Demand response is growing in Australia and is being adopted more widely for large energy customers and organisations. It has a particular benefit for wholesale customers with corporate renewable PPAs in protecting against high price events and achieving greater cost savings.

Our study assessed the potential savings for demand response for wholesale customers in Victoria over a 12-month period, and found energy cost savings from 2.3% to 33.3%, depending on the type of customer and type of demand response deployed. More significant savings were seen where the business was able to shut down a larger scale of plant for shorter periods (2 hours). Demand response provides organisations with an ongoing capacity to manage exposure to high price events.

New technology is broadening the opportunity for demand response in terms of cost, scale and effectiveness. In addition to cost reductions and risk management for organisations, demand response can reduce the cost of wholesale electricity, ancillary and emergency services and network management across the NEM - and new revenue sources are opening up to unlock this value.

Demand response options should be explored by any organisation interested in reducing costs, especially when considering entering into a corporate renewable PPA.