A Quick Overview: What are capacity Charges?
Capacity, in the context of electricity, refers to the total available generation resources that can produce power at any given moment – not the actual amount of electricity being used or delivered across the grid.
Your business’s capacity charges are tied to how much electricity you use during specific high-demand periods. In Western Australia’s South West Interconnected System (SWIS), these peak periods – know as Peak Demand Days – occur on the four day with the highest electricity demand during the warmer months.
The goal of capacity charges is to ensure the system remains reliable by encouraging both investment in energy generation and efforts to reduce consumption during peak times. Typically, demand peaks after sunset, when solar generation drops and overall usage increases.
How These Charges Affect Your Business
If your business can cut back on power use during peak times, you may be able to lower the capacity charges you’re billed for. Here’s how the process works in Western Australia:
- The Australia Energy Market Operator (AEMO) oversees the capacity mechanism in the SWIS.
- Generators are paid by AEMO for making capacity available to ensure the grid can meet electricity demand.
- Change Energy pays AEMO for this capacity and passes these costs through to customers.
- To calculate these charges, AEMO identifies the 12 Peak Trading Intervals (three half-hour periods) on each of the four Peak Demand Days(between December 1st and March 3st).
- If you’re on unbundled pricing, Change Energy uses your electricity usage during these intervals to determine your next year’s capacity charges.
Change Energy’s Summer Demand Program
Change Energy customers can register for the Summer Demand Program. When Change Energy forecasts a peak event will occur, customers are alerted to reduce their consumption to help them save on their energy bills. This service is free to all Change Energy customers and is just one of the ways we help them find efficiencies in their business.
Wanting to register? Please email sales@changenergy.com.au