The behind-the-scenes battle over a new concept to help households slash their power bills. The Australia Institute research shows that consumers could cash in from the National Energy Market using Demand Response.
The Australia Institute, Total Environment Centre, and the Public Interest Advocacy Centre have submitted a rule change request to AEMC, with support from Energy Consumers Australia.
One of the largely unknown features of our national electricity system is that anyone is entitled to submit a request to reform the market rules. The Australia Institute has jointly submitted such a rule change request to the regulator, the Australian Energy Markets Commission (AEMC), to open up the markets to competition from ‘negawatts’.
The rule change request has been submitted by The Australia Institute, the Total Environment Centre and the Public Interest Advocacy Centre, with support from Energy Consumers Australia.
We hope that the AEMC will see the value of this reform and soon start formal consultations, which will engage industry, consumers and government agencies.
What is demand response?
Put simply, demand response provides the opportunity for consumers to receive payments for reducing their power usage during periods of peak demand — creating ‘negawatts’.
Nega… what?!
A ‘negawatt’ is a megawatt of energy conserved, it’s when someone powers down a device that consumes electricity, so they use less than their expected or ‘baseline’ consumption.
If done properly, this conserved energy can compete against megawatts of generated electricity, to balance supply and demand in the National Electricity Market (NEM). The core benefit of this ‘wholesale demand response’ is to lower the cost of energy for all consumers.
This idea was first championed by Warwick Parer, AO in the 2002 COAG Energy Market Review. Parer was Energy Minister under Liberal Prime Minister John Howard.
The world has changed significantly since then. New technologies, including cloud computing, smartphones, and smart load controllers, mean that demand response can be vastly more sophisticated and impactful.
Read our full research at www.tai.org.au
[Originally aired on ABC's 7:30, 24 June 2019]
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