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Supporting demand flexibility in the energy transition


Energy Consumers Australia

Transitioning our energy system to clean resources, such as wind and solar, will require some $320 billion of investment in generation, network and storage assets. If we are to limit the impact this investment will have on consumers’ bills, there must be equal importance given to reshaping the demand side of the energy system. 

Australian households and small business are actively participating in the transition to a clean, affordable energy system by investing in their own energy infrastructure. Integrating the solar panels, batteries and electric vehicles that people are installing at their homes and business premises is essential to managing our transition to a net zero energy system, but we have not given sufficient thought to what we need to do to ensure people are willing to relinquish control of their assets. How we build trust and social licence, as well as providing advice and tools to minimise their energy bills.  

In light of this, we engaged KPMG to investigate how our energy system can better support demand side flexibility. We wanted to know how consumers can be supported to reduce, shift, or increase their energy use at, or for, specific times. As we face a cost of living crisis, it’s more important than ever to consider how we can reduce energy costs by encouraging consumers to be more flexible. 

The KPMG analysis identifies the tremendous potential of demand flexibility to lower energy costs and improve affordability.  The report identifies action that can be taken here in Australia to unlock this demand flexibility and provides examples of initiatives in other jurisdictions that could help accelerate action in Australia. 

The report also supports Energy Consumers Australia’s call for governments to embed the demand-side into energy market decision-making and address the barriers consumers face in taking control of their energy bills. We need market bodies to integrate demand flexibility into system planning.  We need government and retailers to create programs and policies that recognise and reward – not punish – consumer assets and behaviour. And finally, we need governments and regulators to review and update consumer protections so consumers feel confident that they can participate in the market. Together, these actions will enable increased consumer agency and better outcomes for consumers overall.  

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