COAG Decision Regulation Impact Statement – Australian Energy Market Commission
On 11 June 2020, the Australian Energy Market Commission (AEMC) released a final rule determination in relation to the National Electricity Amendment (Wholesale Demand Response Mechanism) Rule 2020.
This final determination sets out a series of changes to the National Electricity Rules to facilitate wholesale demand response in the National Electricity Market, principally through implementing a wholesale demand response mechanism.
Under this rule, large consumers would be able to sell demand response in the wholesale market either directly or through specialist aggregators for the first time. Under this mechanism, these consumers would be able to actively participate in central dispatch and be rewarded for the value they provide to the system. In addition, this mechanism would capture the benefits of greater demand side participation and share these benefits with all consumers. This final rule allows for new technologies, particularly those brought about by increased digitalisation, to be valued within the market framework.
The implementation date for the final rule is 24 October 2021, which means a wholesale demand response mechanism will be operational ahead of summer, which is historically the period in which peak demand is highest and in which a wholesale demand response mechanism may be most useful.
The final determination has been assessed by the Office of Best Practice Regulation as compliant with requirements for a Council of Australian Governments Decision RIS.
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