Big companies to be paid to cut power usage – New AEMC Demand response rules

Large companies, such as manufacturers and smelters, will be paid to cut their energy usage, as part of an overhaul of the National Electricity Market.While demand response has been used by the market operator during the summer months in recent years – to reduce pressure on the network during peak periods – the new rule change will allow the market to also take on the role.

The wholesale demand response mechanism rule change by the Australian Energy Market Commission will come into effect on October 21.

But the groups who pushed for the law changes – including The Australia Institute, the Public Interest Advocacy Centre and Total Environment Centre – were disappointed the rule change was not extended to households.

“We will continue to push for households and small business – that is, the other 90 per cent of customers – to be able to reduce their energy costs by participating in the demand response market,” Total Environment Centre energy market advocate Mark Byrne said.

The AEMC rule change announced on Thursday will allow the introduction of a new player into the National Electricity Market – a demand response service provider.

The demand aggregator will enter into contracts with large customers to provide demand response – either by reducing load or importing electricity into the grid. They will then be paid for their services.

If a large customer wants to they can become a demand response service provider themselves, changing their output depending on wholesale price signals.


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