Preparing for winter: Why flexible demand matters across Australia’s energy markets

Winter is becoming a more important season for demand response in Australia’s energy markets.

AEMO’s latest winter outlook forecasts stable and reliable conditions across both the National Electricity Market (NEM) and Western Australia’s Wholesale Electricity Market (WEM), supported by new generation and battery storage capacity, strong plant availability and healthy fuel reserves.

But even in a stable outlook, winter readiness still matters.

AEMO notes that cold snaps remain possible across winter and could still drive periods of elevated electricity and gas demand. Planned maintenance outages across electricity and gas infrastructure will also continue throughout the season.

That matters because in winter, grid conditions can change rapidly.

Five years ago, winter wasn’t typically viewed as a major season for demand response participation in Australia. Yet in 2025, Enel X’s wholesale market programs delivered stronger customer earnings than in previous years, with a growing share of value occurring during winter periods.

The reason is simple: volatility is increasingly emerging during winter morning and evening peaks, particularly when cold weather coincides with lower renewable output or unexpected generation outages.

Last winter provided a clear example.

After relatively mild autumn conditions, the market shifted sharply in June as cold snaps, low wind conditions and an unplanned coal outage tightened supply-demand conditions across the NEM. 

Wholesale prices across all mainland NEM regions simultaneously breached $16,000/MWh, with Victoria reaching the market price cap.

That is a major market signal, demonstrating how quickly the system can move from stable conditions to scarcity.

Hitting the price cap also shows why flexible demand is becoming more valuable in winter.

During the June volatility events, demand response dispatch volumes more than doubled compared to the same period in 2024, with commercial and industrial businesses across sectors reducing load to help support system reliability.

Sectors that played a key role included:

• refrigerated warehousing and cold storage
• heavy manufacturing and industrial operations
• water and critical infrastructure assets
• high-load operational environments such as data centres.