Cross-industry pressure builds for ‘demand response’ energy reform

AEMC, NEM, demand response

A broad range of Australian business and industry representatives have written a letter supporting changes to the country’s energy rules that would allow demand response aggregators to enter the National Energy Market.

The proposed change would allow companies to pay households, farms and businesses to reduce their use of energy, instead of turning on more expensive generators, when demand and wholesale prices are high.

Signatories to the letter, printed in the Australian Financial Review today, include the Australian Industry Group, BlueScope Steel, CSR Limited and the National Irrigators Council.

“Industrial, agricultural and household consumers are paying too much for electricity. Reliability is under pressure and Australia lacks a durable policy for appropriate emissions reduction in the electricity sector,” the letter says.

“One of the best ways to address this energy trilemma is to cut peak demand, through wholesale demand response.”

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The demand response rule change was originally proposed to the Australian Energy Market Commission in August 2018 by The Australia Institute, the Total Environment Centre and the Public Interest Advocacy Centre.

“Demand response competition represents an ideal opportunity for the Morrison Government that would help protect reliability and lower prices as coal power retires,” Australia Institute executive director Ben Oquist said.

“This reform to allow demand response companies to freely enter the market is the best first step for the new Morrison Government to address the energy trilemma of pollution, prices and reliability.

“The retailers want to prevent their customers becoming their competition, so they have put in an alternative rule change that locks up the market, which has rightly been rejected by the ACCC.”

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