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Background
On 29 March 2011, the Ministerial Council on Energy (MCE) directed the AEMC to undertake a further Review into Demand Side Participation (DSP) in the National Electricity Market. This Review is titled: Power of Choice - giving consumers options in the way they use electricity (formerly Stage 3 DSP Review).
The purpose of the Review is to identify market and regulatory arrangements that would enable the participation of both supply and demand side options in achieving an economically efficient demand/supply balance in the electricity market.
The Review is to have a broad focus that extends beyond the National Electricity Rules. It will consider all arrangements that impact on the electricity supply chain. In undertaking the Review, the AEMC is to consider the following key areas:
- market frameworks to maximise value to consumers from services enabled by new technologies, such as smart grids;
- effectiveness of regulatory arrangements for energy efficiency; and
- efficient operation of price signals.
These key areas are to be considered along with any other matters that the AEMC considers relevant to the objective of the Review. Details of each of these areas for investigation can be found in the MCE's Terms of Reference.
The Review builds on work already undertaken by the AEMC regarding DSP in the NEM. Further information about the AEMC's previous Reviews of DSP in the NEM (Stages 1 and 2) can be found at www.aemc.gov.au.
On 15 July 2011 the AEMC published an Issues Paper for the Power of Choice Review. The Issues paper outlines the approach and methodology we propose to adopt in identifying the market conditions and market and regulatory arrangements needed across the electricity supply chain to facilitate the efficient investment in, operation and use of demand side participation (DSP) in the NEM. The paper also canvasses some of the issues for consideration in the Review.
On 21 December, the AEMC published three background consultant research reports for the Power of choice review. These reports relate to:
- the opportunities for demand side participation (DSP) given the current nature of electricity use in the market (Ernst and Young);
- a stocktake and analysis of current DSP options available based on existing DSP and pilots and trails occurring across the market (Futura Consulting), and
- Investigation of efficiency of current price signals in the NEM (PwC).
These reports formed input as appropriate to our Directions paper. Stakeholder feedback on the reports is welcome through our consultation submission phase for the directions paper.
Stakeholder Reference Group
In accordance with the MCE Terms of Reference for this review, the Commission is required to set up a Stakeholder Reference Group (SRG). The Terms of Reference for the SRG and its list of members are provided below. For each meeting, the synopses and presentations will also be made available.
The first meeting of the SRG was held on 8 June 2011. The second meeting was held on 24 October 2011. Synopses and presentations made at those meetings are provided below.
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