Wholesale demand response mechanism draft determination

PIAC responded to the Australian Energy Market Commission’s (AEMC) draft decision to implement a demand response mechanism into the wholesale energy market.

We broadly support the AEMC’s draft decision, in particular its settlement approach, which ensures the direct costs of participating in wholesale demand response are, as far as possible, borne by those who directly benefit. However, we consider two aspects of the draft decision should be amended: the mechanism should be introduced before July 2022 and all consumers, including households, should be allowed to participate from the outset.

We address details of the draft rule and discuss options for introducing the mechanism before 2022 and extending it to all consumers while providing appropriate protections.

We also map how the draft decision meets principles, objectives and requirements developed by the rule proponents as an input to the AEMC’s technical working group process.