On the 12th of March, 2020 the AEMC released a second draft determination on the implementation of a wholesale demand response mechanism in the market – what we’re calling the ‘Negawatt Dispatch Mechanism’. In addition, the AEMO published a high-level design to assist the understanding of those involved and eventual stakeholders.
This process originally began in October 2018 after submissions from the Australian Energy Council and the SA Government. In December of last year, the deadline for a final decision was extended until the 11th of June 2020.
Major updates and changes to the draft rule from the previous version include:
- Lower implementation costs for AEMO due to reduced investment in systems that are expected to become redundant if a two-sided market is introduced.
- An earlier start date. By reducing the costs and complexity of implementing the mechanism, the implementation date has been brought forward from 1 July 2022 to 24 October 2021.
- Greater opportunities to learn about demand side participation in the event that a two-sided market is introduced.
This draft rule also including a new category of registered market participant. The new category would be named “Demand Response Service Provider” (DRSP), and participants within this category would have the ability to bid demand response directly into the wholesale market in lieu of generation and engage directly with a customer without involvement from that customer’s retailer.
More information about the second draft ruling can be found in the AEMC’s media release here.