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AGL responds to the ‘cost benefit assessment of the demand response mechanism’ consultation paper

Simon Camroux – Manager of Wholesale Markets Regulation at AGL, has submitted an open letter to the Department of Industry responding to the recent Demand Response Mechanism (DRM) Consultation Paper. The letter goes on to state “It is clear to AGL that there is currently no market failure that has been identified that would actually merit the implementation of the DRM. Electricity consumers, both large and small, are readily able to hedge their exposure to flucutations in market prices (from – $1000MWh to $13,500MWh) with a number of electricity retailers, improve consumption efficiency or invest in supply substitutes i.e. solar PV. Additionally, the availability of hedge products to manage market exposure is only increased when there is a significant supply overhang – as currently exists in the NEM.”

The original report compiled by Oakley Greenwood can be found here.

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