PIAC responded to the Australian Energy Regulator’s (AER) Wholesale Demand Response (WDR) Participation Guidelines (the Guidelines) Issues Paper.
We highlight wholesale demand response benefits energy consumers at a system-wide and individual level and these benefits should grow as the WDR mechanism is established and matures. The AER has a critical role in enabling these benefits, through the development and implementation of fit-for-purpose regulation that supports the integrity of the energy market without creating or exacerbating barriers to DR participation.
The Guidelines appear predicated on the assumption Demand Response Service Providers (DRSPs) and participating energy users will, if given the opportunity, manipulate baselines and the WDR market for inappropriate gain. PIAC contends this risk of gaming is overstated for a number of reasons and should not form the basis of the AER’s regulatory approach. PIAC recommends the AER take a regulatory approach which acknowledges DRSPs and participating energy users have little incentive and so are unlikely to manipulate or game arrangements.
We provide feedback on two issues with the Guidelines: self-testing for compliance and information retention.