AEMO Demand Response Mechanism
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Demand Response Mechanism and Ancillary Services Unbundling
The Demand Response Mechanism (DRM) and Ancillary Services Unbundling (ASU) are two of the recommendations from the Australian Energy Market Commission’s (AEMC) Power of Choice review. The package of recommended reforms is intended to provide households, businesses and industry with more opportunities to make informed choices about the way they use electricity and manage expenditure.
DRM is one of the ways to manage energy price rises driven by the network investment required to meet peak demand. ASU enables a third party to register and sell Frequency Control Ancillary Service (FCAS) using aggregated loads independently of the retailer.
The Standing Council of Energy and Resources (SCER) presented AEMO with terms of reference to establish an advisory stakeholder working group to support AEMO in developing the project.
This project will be a landmark development in the NEM and has potentially wide-ranging implications for a number of AEMO and market participant systems and processes. The DRM system enables both supply and demand market participants to respond to high electricity demand by altering their behaviour with the aim of delivering the most efficient market results.
The benefits from DRM will be to alleviate requirements for further generation and network investment by allowing large and medium consumers to see the value of changing their energy use in line with market signals, such as the spot price. Market participants can decide to either continue consuming electricity or reduce their use and be paid the spot price for that level of reduced consumption.
Between February and June 2013, AEMO established a project to undertake the work and established a working group and a number of sub-working groups to advise AEMO on a set of initial business requirements covering the major aspects of DRM and ASU – dispatch and notification, metering, registration, reporting and settlements. At the culmination of that work AEMO developed the high level design for DRM which encapsulated the high level features of the design.
Subsequently AEMO worked with the Demand Response Mechanism and Ancillary Services Load Working Group to develop the Detailed Market Design document. That document was intended to inform system development planning, rules development and project budgeting.
DRM Detailed Design
18 Nov 2013 | 1.78 MB (.pdf)
DRM High Level Market Design
20 Aug 2013 | 643 KB (.pdf)
Baseline Consumption Methodology - Phase 1 Report
20 Aug 2013 | 1.3 MB (.pdf)
Baseline Consumption Methodology - Phase 2 Report
11 Oct 2013 | 2.54 MB (.pdf)