Sydney, September 19, 2025 – The shift toward a flexible, secure energy system is gaining momentum. So too is the opportunity for businesses to monetise the inherent flexibility in their operations with Demand Response, which supports the energy transition while securing a new revenue stream.
Recent developments from the government-backed capacity tender in NSW and expanding federal support through the Capacity Investment Scheme, to the National Electricity Market (NEM) Review Panel’s recognition of the vital role of Virtual Power Plants (VPPs), all signal a decisive move toward harnessing distributed and consumer energy resources to safeguard the grid. The message is clear: the market needs flexible demand, and it’s ready to pay for it.
The NEM Review highlights that orchestrated flexible demand, distributed energy resources (DER) and consumer energy resources (CER) are not just a future vision, they are already delivering value today. The Panel identifies clear opportunities to better integrate these resources into the market, including enhancing mechanisms like the Energy Services Entry Mechanism (ESEM) and creating new market products that give consumers greater choice and certainty.
Government procurement programs are sending a strong commercial signal to invest in flexibility. The latest NSW 500 MW firming tender, part of the state’s Electricity Infrastructure Roadmap, builds on the initial round in which Enel X was the sole VPP provider selected. The new tender has been announced and is expected to open in early Q4 2025.
Enel X competed ‘head-to-head’ with grid-scale batteries to secure its NSW Firming Capacity contract to orchestrate flexible demand when the grid is under stress. The first round began with a 380 MW target that expanded to roughly 980 MW once the Commonwealth’s Capacity Investment Scheme (CIS) was integrated, ultimately delivering 1,075 MW of firming capacity. Enel X’s VPP is contributing 95 MW of flexible demand from businesses across Greater Sydney, the Central Coast, Newcastle and Wollongong.
The NSW government’s goal is clear: secure dispatchable capacity that can respond rapidly to market and grid conditions. These tenders give VPPs a defined role alongside large-scale batteries, pumped hydro, and other firming assets, creating new opportunities for businesses to participate in the energy markets.
Why firming matters now
- Coal-fired power stations are retiring, increasing the risk of supply shortfalls during peak demand.
- Renewable generation fluctuates daily, making reliable firming capacity essential to avoid blackouts.
- VPPs and batteries deliver clean, fast-response capacity more cost-effectively than building new gas plants that sit idle for much of the year.
How C&I businesses can benefit
By joining Enel X’s VPP, large energy users can:
- Earn guaranteed revenue by temporarily reducing or shifting electricity use, typically only a few times a year, at no cost.
- Monetise existing flexible assets such as energy-intensive equipment, backup generation, refrigeration, or onsite batteries.
- Support grid stability, preventing outages and price spikes.
- Strengthen ESG performance by enabling a cleaner, more resilient grid.
Carl Hutchinson, Country Manager Enel X Australia, said, “Our VPP harnesses flexible demand to deliver clean, reliable capacity, faster and at a fraction of the cost of building new infrastructure. This isn’t just a win for the grid, it’s a win for progressive businesses turning flexibility into guaranteed revenue.”
Why now is the time to join a VPP
With the 2027–28 summer forecast to test NSW’s capacity limits, the new 500 MW tender is a clear signal: demand for flexibility will only grow. Enel X is already working with forward-thinking organisations including Air Liquide, Americold, Sydney Water, and Visy, who are actively contributing to grid stability through VPP participation.
Government tenders and incentives under the CIS and the NSW Roadmap, backed by the NEM Review’s push for greater market integration of DER, are accelerating the shift to a smarter, more inclusive energy system. For C&I businesses, the opportunity is here and growing – now is the time to unlock the value of flexible demand.
Enel X operates the largest Demand Response VPP in Australia, with more than 750MW managed across 550+ business sites. Globally, Enel X is the leader in Demand Response VPPs, with 9+ GW supporting electricity grids around the world. The company manages more than 110 Demand Response programs worldwide, managing energy loads from over 16,000 customer sites.
