The Australian Energy Market Commission (AEMC) has released a final report recommending that the wholesale demand response mechanism (WDRM) should continue operating in the national electricity market (NEM).
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The WDRM allows large electricity users to be paid for reducing their consumption when the grid is under stress—for example, a factory temporarily switching off equipment during peak demand periods.
AEMC chair Anna Collyer said, “The WDRM enables some electricity users to effectively incorporate their demand response participation into market outcomes, which benefits all electricity consumers.
“This is currently the only market mechanism in the NEM wholesale market that facilitates payment for reducing load against a baseline. It’s also the only mechanism that allows non-financially responsible market participants to participate in the electricity market.”
The AEMC maintains its commitment to strengthening demand-side participation in the NEM. Integrating price-responsive resources into the NEM (IPRR) and unlocking CER benefits through flexible trading rules provide the main vehicles for broad demand-side participation.
The AEMC’s second recommendation is that the pending rule change request, Expanding eligibility under the WDRM, should be initiated to assess whether sites with multiple connection points should be allowed to participate in the mechanism.
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This has the potential to increase participation in the WDRM and deliver additional benefits. The AEMC said it anticipates the initiation of this rule change in the first half of 2026.
