The Wholesale Demand Response Mechanism, which came into effect in October 2021, helps to bring down electricity costs for all consumers by:
- Reducing demand during periods of high wholesale prices
- Reducing the spot price of wholesale electricity
- Reducing retailer costs thanks to lower average electricity prices and less volatility in the wholesale market
We recommend that the Australian Energy Market Commission (AEMC)'s Review into the Wholesale Demand Response Mechanism explores the costs and benefits of revising eligibility criteria for participating in the Mechanism, to ensure all cost-effective demand response can participate, including allowing aggregated household and small business demand.
Consumers are telling us that they are interested in demand response (Energy Consumer Behaviour Survey, October 2023) and having their flexible load be controlled to provide value to the grid in exchange for financial benefits — we just need to create the value stream and gain their trust.
