Energy customers asked to reduce usage under new reform

By Ceyda Erem ·

Mozo previously reported on a new energy scheme designed to help the grid cope and remain reliable during periods of high demand. It was called the ‘wholesale demand response’ and according to the Australian Energy Market Commission (AEMC), the scheme is now likely to start in October of next year. 

Under the wholesale demand response, high usage energy customers such as farms or factories are encouraged to reduce their electricity consumption when demand spikes. In return, customers could be paid in credits to go toward their energy bill. 

“Small and large energy users respond differently so it’s more practical – and quicker – to start with the group whose demand is easiest to predict. We can also use this experience to learn valuable lessons about dispatching electricity in this new way,” said AEMC chief executive, Benn Barr. 

According to the AEMC, the wholesale demand response is a much cheaper way to manage unexpected demand spikes, instead of paying electricity generators to increase supply. 

The AEMC explained that this reform may result in a “two-sided” energy market, where customers of all sizes would have the power to actively participate by trading their energy use. 

This would also mean that various energy resources like solar power are distributed within the grid. 

“We are taking a sensible, stepped approach to a two-sided market by first allowing larger energy users to routinely trade their energy use in the wholesale market,” Barr said. 

“But taking a stepped approach to consumer participation in the market is cheaper, more practical and safer for households and businesses.” 

What does all this mean for energy prices?

While the AEMC is limiting participants in the wholesale demand response to larger customers only, residential and small businesses customers are likely to see a difference in their annual bill, at least that’s what Energy Minister Angus Taylor says. 
 
“The benefits of wholesale demand response will flow through to all households and businesses through lower electricity bills and improved network reliability,” Taylor said.

“Lower electricity costs on small businesses and industry means Australians have more money to invest, expand and grow jobs – and this is particularly important as businesses recover from COVID-19." 

Of course, you don’t have to wait for a rule change to see your energy bill decline. Our energy comparison tool can help you compare and switch to a better value energy plan today! All you need to do is enter your postcode below to get started.

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Ceyda Erem
Ceyda Erem
Money writer

Ceyda Erem is Mozo’s authority on Energy, as well as having broader expertise as a personal finance writer. She loves to put her researching and writing talents into stories that help our readers to make more informed financial choices, whether that’s about finding the best energy deal or writing about the latest sneaky bank tricks. Ceyda has a Bachelor of Arts (major in writing) from Macquarie University.