The Australian Energy Market Commission has announced a draft decision on the rule change request for demand response in the wholesale market.
Published on Friday, 19 July 2019
A rule change in the Australian energy market could introduce a mechanism for demand response (DR) services to be sold directly into the wholesale market. The request broadens options for DR participation in the wholesale market, which is currently controlled by energy retailers. The change would open up the Australian National Energy Market (NEM) to businesses like Enel X, who are skilled in delivering DR services. Enel X supports the request, recently sharing its perspective with one of its Australian DR customers on current affairs programme ABC 7.30.
Demand response is revolutionising the role of energy consumers, turning them into players in the energy system. Customers can now make conscious choices about how much and when to consume energy, and play an active role in the security and stability of the electricity grid. Opening the wholesale market is expected to bring many economy-wide benefits: demand response is a cost-effective resource for the grid system that has the potential to lower spot prices which can improve business competition.
In the ABC 7.30 report, Head of Enel X Asia and Oceania Jeff Renaud said the company is supportive of the change because it aligns with Enel X’s belief in fair competition, and would contribute to a more resilient, sustainable electricity grid system. Opening the wholesale market to DR participation would also provide an additional way to deliver value to consumers.
Also featured in the ABC 7.30 programme was AB Oxford Cold Storage, an Enel X client that operates Australia’s largest cold storage facility. Engineering Manager, Gabor Hilton discussed AB Oxford’s direct experience with DR services that enabled the business to save around 10% on its energy bills for the energy-intensive facility, contributing directly to the bottom line.
With high electricity prices, a result of recent and significant increase, this reform in Australia’s wholesale market is long overdue. If the rule change is passed, Enel X will be able to help its commercial and industrial (C&I) clients in Australia access the market. Participation would enable them to leverage their operational flexibility through DR with existing equipment in response to high and low energy prices, providing the opportunity to reduce energy costs. DR is an economic, intelligent and flexible option that can help meet demand at times of short supply.
The Australian Energy Market Commission published a draft decision on the rule change request today, and is expected to reach its final decision in November 2019. If the proposed change is made, Enel X’s C&I clients will be able to make their capacity available to the wholesale market in line with their activities and energy needs, lowering energy costs and providing better resiliency to the grid system.
If the rule change is made, Australia’s wholesale market will open up new, value-creating opportunities for C&I businesses to participate in the ongoing transformation of energy.