How do demand tariffs work with Amber?

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Demand charges are a type of network charge that are a little more complicated than the common flat or time of use (TOU) tariffs.

Demand charges are not actually based on your usage - instead, it’s based on your highest 30 minute period during a period (usually a month). Usually, the demand periods apply only during a window each day (e.g. between 3-8 pm) and your highest 30 minutes of usage during this window will set the cost for the whole month.

What's good to know is that demand tariffs work out to be even cheaper than standard tariffs if you are able to spread out your usage throughout the peak period. 

Learn more about how to save when you're on a demand tariff. 

It's easiest to explain demand tariffs with an example - Ausgrid’s EA116 Demand Tariff

The flat usage charge for this tariff is 2.8855 c/kWh (excl. GST), and on top of that are the Demand Charges:

demand_seasons.jpg


Seasons:

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*example tariff from 2021-2022 financial year, your actual tariff rates will depend on your own network and metering/property type.

The network looks at each 30-minute period during the 'demand window' throughout the entire calendar month, finds the one in which you used the most power, then applies their demand rate to that period.

For example, if you were on this tariff and if your maximum power requirement between 5pm and 9pm in July was 2 kW, the demand portion of the network charges would be:

21.3184 cents x 2 kW x 31 days = $13.22 + GST

Ausgrid would still charge you the consumption rate of 2.8855 c/kWh (+GST) for all your energy consumption during the month as well, but that’s the great thing about demand tariffs, the flat usage rate is almost always much lower than other tariffs.

Demand tariffs can be quite good for Amber customers, especially if you're able to move your demand away from those peak times.

Note: The demand charge only applies during certain hours of the day so it wouldn’t make a difference if a person on this tariff were to run 5 appliances at the same time outside the demand window.

How do I save money on a demand tariff?

Demand tariffs generally have a very low flat network usage charge (c/kWh) and they subsidise that by applying a demand element during the . The demand element is not based on how much energy you use, it's about your peak power requirement during certain times of the day, and certain months of the year.

The obvious way to save is to avoid your demand window when the demand charges apply, but if that isn’t possible try to avoid using more than one high power device at once during this time. By only running one thing at a time,  rather than running a whole lot of appliances at the same time during the demand period, your maximum usage will be lower. Find out how much power your devices at home draw here.

Different networks have different charge periods and demand tariff structures, so if you'd like to learn more about your demand charges, please do reach out - our team will be happy to investigate your network tariffs further with you.

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2 comments
  • Why is there no mention of this on the sign up page!!??

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  • ditto. I do not understand the comment 'Demand tariffs generally have a very low flat network usage charge (c/kWh)' in the context of live wholesale pricing. I am paying up to 71c/kWh in peak period (plus demand and excluding spikes) - not what I'd call a 'low flat... charge'!

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