How consumers could cash in from the National Energy Market using Demand Response

The Australia Institute, Total Environment Centre, and the Public Interest Advocacy Centre have submitted a rule change request to AEMC, with support from Energy Consumers Australia.

What is demand response?

Put simply, demand response provides the opportunity for consumers to receive payments for reducing their power usage during periods of peak demand — creating ‘negawatts’.

Nega… what?!

A ‘negawatt’ is a megawatt of energy conserved, it’s when someone powers down a device that consumes electricity, so they use less than their expected or ‘baseline’ consumption.

What’s the proposal?

The Australia Institute’s rule change proposal has two core features which will maximise its competitive impact, in both wholesale and retail markets. Our rule would create a new category of market participant in the NEM: demand response service provider (DRSP). The DRSP could aggregate hundreds or thousands of residential and business consumers into a ‘virtual’ power station, generating up to millions of negawatts.

What happens next?

The AEMC will make its decision about the negawatts rule by assessing what impact it would have on lowering costs and maintaining reliability, which is mandated in Australia’s legislated National Electricity Objective (NEO). We are optimistic that the AEMC will determine that wholesale demand response will help the NEM meet the NEO, with or without the NEG. (Yes, acronyms are your friend.)

The ‘Wholesale demand response’ rule change is a joint project of the Total Environment Centre, Public Interest Advocacy Centre and The Australia Institute, with support from Energy Consumers Australia.



an independent think-tank based in Canberra >

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store