Demand Response Mechanism Rule Change Request (March 2015)

Publication date: Wednesday, 25th March 2015.

In the Power of Choice review, the Australian Energy Market Commission (AEMC) recommended the introduction of a demand response mechanism (DRM) that facilitates demand side participation in the wholesale electricity market, and introduction of a new category of market participant for non-energy services. In December 2012, the former Standing Council on Energy and Resources agreed that work should begin to develop these proposals.

In January 2013, the Australian Energy Market Opeartor (AEMO) was requested to lead this work. AEMO developed a high level and detailed design for how a DRM could operate. However, at the 13 December 2013 Council meeting, Ministers noted the change in market circumstances since the completion of that review and requested that officials undertake further work on the DRM, including a cost benefit study, and report back.

In May 2014 officials contracted Oakley Greenwood to undertake further analysis of the DRM including market modelling. Oakley Greenwood provided its final report to the Council in December 2014. Following review of the final report, Ministers agreed that consumers would benefit from changes to the rules that allowed greater access to demand response services and tasked officials with preparing a rule change proposal for the consideration of the EMC. The rule change proposal was submitted in March 2015.

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