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Jul 18 2019

AEMC Demand Response Draft Determination

The Australian Energy Council welcomes the Australian Energy Market Commission’s new Draft Determination as an important step forward in addressing the significant implementation challenges and costs of expanding the Wholesale Demand Response Mechanism. 

The Australian Energy Council’s Chief Executive Sarah McNamara said the energy industry supports demand response, which already occurs between retailers and their customers.

“We are pleased the AEMC has recognised the complexities involved in the system and settlement changes in its proposal,” Ms McNamara said. “This is why the Draft Determination limits its application to large customers, adjusts the settlement design, and provides several years lead-time for what is a major market redesign.

“However the challenge will be to encourage further development of demand response and manage accurate measurements to ensure the lowest costs to the market and ultimately consumers.

“It is difficult to set accurate baselines, which are critical, and to minimise the added costs to settlement arrangements with new third party demand response providers becoming involved in the market settlements.

“There is no doubt that this rule change and its new settlement arrangements, while an improvement on what was proposed by some parties, will still add complexity to what is an already complex wholesale market settlement arrangement.”

About the Australian Energy Council

The Council represents 23 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

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