Demand response market - win for big players, no joy for small consumers
The Australian Energy Market Commission will keep the Wholesale Demand Response Mechanism in place, paying big energy users to cut power when the grid is tight.
Launched in 2021, the WDRM rewards large businesses for reducing demand, helping stabilise the grid and limit costly new generation.
The AEMC says the scheme has delivered $5.75 million in net benefits and 237 MWh of dispatched demand response.
Capacity has grown from 74 MW to 150 MW but remains below expectations due to restrictive design rules.
The AEMC backs a rule change to let multi-site operators, like data centres, join the mechanism.
Data centres could be major players, with AusNet reporting 10 GW of planned connections in the next two years.
Enel X estimates 300 MW of flexible demand is currently locked out but could join under the new rule.
The Commission says this expansion could occur without major cost or system changes.
However, it ruled out adding small customers, citing high complexity and low benefit.
Instead, small users may join future schemes like the Voluntary Scheduled Resource model as Australia builds a more flexible grid.