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Explaining Demand Response

“Demand Response” (sometimes called Demand Side Response) is a term given to a range of activities undertaken by electricity users, or people acting on their behalf, to temporarily change grid consumption in response to some form of commercial incentive.  This might be:

1)   Curtailment, at some times

This curtailment activity might be taken at times of tight supply/demand balance (and/or high spot prices) in the wholesale electricity market, or at times of high network loading.

This reduction of (net) consumption from the grid might occur through use of onsite generation

2)   Increased consumption, at other times

These increases in consumption have been occurring for many years (e.g. when prices have been low), but take on added importance as the energy transition gains pace with increasing incidence of negative prices.


In this 2011 report of the North American Electricity Reliability Corporation (NERC) they provided a very useful framework for understanding different categories of demand response – figure 1 on page 9.

Because of its usefulness, we’ve translated this diagram into an indexing method – please click on a box below and we’ll direct you to a page that provides more information about each category of demand response, but in the context of the Australian National Electricity Market (NEM).


Click through the diagram below to read more about each category

Level 1 Arrow Faded —-Demand Side Management Button2

————————————————————————————Level 1 to Level 2

Level 2 Arrow Faded——– Demand Response Button——– Energy Efficiency Button

——————————————————————————-Level 2 to Level 3

Level 3 Arrow Faded—————— Dispatchable Button————— Non-Dispatchable Button

——————————————————Level 3 to Level 4 (a)————————- Level 4 to Level 5 (b)

Level 4 Arrow Faded——— Reliability Button —–Economic Button—— Time-Sensitive Pricing Button

——————-Level 4 to Level 5 (a) Level 3 to Level 4 (b) —————–Level 4 to Level 5 (b)

———–Capacity Button Reserves Button Energy-Voluntary Button Regulation Button Energy Price Button Time Sensitive Pricing


Because the curtailment/increase activity is temporary, “Demand Response” fits into a broader category of “Demand Management” that also includes permanent demand pattern changes through practices such as energy efficiency – as shown above.

There are a number of different mechanisms by which “Demand Response” can work in Australia’s National Electricity Market (NEM).  In this site, we seek to explain all the different methods by which Demand Response is, and has been, used in the NEM (plus some proposed new methods, as well).  It provides a collation of materials relating to Demand Response that we have found in our travels.

Hence, if you see something we have missed, please let us know so we can continue to improve this service.