Transmission Network Service Providers are infrastructure organizations that transmit energy from the generators and supply the electricity to our homes and businesses. Network peaks occur because there is insufficient capacity to meet a localized demand. Such peaks cause overloading of the network assets (powerlines, cables and transformers). Minor overloads may be tolerated. However, prolonged or excessive overloads can trigger a loss of supply to significant numbers of consumers. Networks therefore operate (in the main) to an N minus 1 (i.e. N-1) regime: such that N is the full capacity of the local assets and minus 1 refers to diminishing their asset capacity by the largest single component (usually a transformer). This ensures that:

• assets are not overstressed
• there is sufficient redundancy to manage occasional overloads
• assets are not grossly underutilized

Full service demand can be accommodated when a major component is out for maintenance.

All zone substations (for example) on the TNSP networks should be operating at less than N-1 capacity. However, our research found that over 30% of all the zone substations in the NEM are above N-1 and are therefore overloaded for at least some time. Any period of demand which is above the N-1 capacity puts some consumers' total demand at risk, generally without their explicit knowledge.

Many of the stressed networks are overloaded for less than 10 hours per year: far too infrequently to demand an expensive augmentation. But simply curtailing some load to bring the network back to within its N-1 parameters is simple and cost effective. The following generic business case shows that for small zone substations requiring a capital upgrade of only 2 million, the TNSP can benefit by around $500, 000 (by using DSR to defer capital expenditure). Active use of DSR by TNSP's will also reduce network costs (these are costs that are ultimately borne by consumers) and allows the NSP to better manage their resources.