Energy Consumers Australia (ECA) and Australia’s national science agency, CSIRO, have published the FlexCost methodology, a new economic analysis framework that will estimate how demand-side energy resources can contribute to a lower cost electricity system.
Demand-side energy resources include home batteries, electric vehicles (EVs), and energy-efficient appliances, which can contribute to a lower cost electricity system.
The detailed methodology paves the way for the inaugural FlexCost Report to be completed in late 2026.
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The FlexCost Report will help decision-makers understand the cost of demand-side resources, such as home batteries, electric vehicles (EVs), and energy-efficient appliances, and compare these to traditional supply-side investments such as power stations and power lines.
For example, FlexCost can be applied to help decision-makers understand whether it is more cost effective to invest in hundreds of thousands of “vehicle-to-grid” car chargers or to add additional large-scale, transmission-connected batteries to manage peak demand. Over time, this analysis will help ensure consumers do not pay more than what is needed to provide them with the energy services they want.
“Consumers should receive the energy services they need at the lowest possible cost,” ECA general manager advocacy and policy Brian Spak said.
“To achieve this, Australia needs to change how we plan the energy system, so decision-makers consider all credible options and not just traditional infrastructure.
“We believe FlexCost will provide a greater understanding of how to make Australia’s electricity system more reliable, secure and flexible in the most cost-efficient way possible.
“Australians should pay a fair price for their energy and not a cent more. We believe FlexCost can help ensure that system planning is more evidence-based and ultimately saves consumers money.”
Through its application, FlexCost will help address a major information gap in electricity system planning by estimating the cost of using demand flexibility and energy efficiency as a complement to more electricity generation and network infrastructure. By allowing demand-side resource costs to be compared against supply-side investments, decision-makers can ensure they invest in the least cost ways to meet consumer energy needs.
“As the national voice for energy consumers, we funded this work because better information leads to better decisions, which leads to better outcomes for consumers,” Spak said.
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“Through ongoing collaboration and consultation with industry experts and our valued partners, including CSIRO, we look forward to helping progress the application of the FlexCost methodology to analyse the costs of implementing demand side resources.
“The resulting inaugural FlexCost Report, due later this year, will provide governments, market bodies and industry with an applied framework to assist best practice future system planning, policy and program design.”
