How to set up the NSW Peak Demand Reduction incentive

Summary:

Effective November 1, 2024, battery installations in solar systems are eligible for Peak Reduction Certificates (PRCs) under the NSW Peak Demand Reduction Scheme (PDRS). This initiative helps reduce peak electricity demand, lower power bills, and mitigate the risk of blackouts by incentivizing households and small businesses to install behind-the-meter battery energy storage systems (BESS) and participate in Virtual Power Plants (VPPs).

How the Incentive Works

Under the scheme, two activity types are introduced:

• BESS1: Installation of a new behind-the-meter battery energy storage system.

• BESS2: Participation in a demand response contract (VPP).

Customers are rewarded when their batteries discharge and offset demand during peak periods (defined as 2:30pm to 8:30pm AEDT, September 30th to March 31st). Each 0.1kW of peak demand offset allows creation of 1 PRC. PRCs can be sold for a dollar value—similar to STCs in Australia—and the proceeds typically reduce the system’s upfront cost for the end customer.

How OpenSolar Supports PRC Modeling

OpenSolar simplifies the modeling of PRCs through the Peak Hours Battery Incentive type available in your Incentive database.

Key Features:

• New organizations (created after November 2024): Incentive is preloaded and ready to use.

• Existing organizations: Add it manually by navigating to

Control > Other > Incentives > + Add Incentinve, then select

Incentive Type "Peak Hours Battery Incentive"

Once selected, parameters for BESS1 or BESS2 will auto-populate based on your configuration. When modeling BESS2, toggle on the “Behind the Meter Contract (VPP)” to apply relevant values.

You also retain the flexibility to override these values manually if needed.

BESS1 vs BESS2 Parameters