Market Reviews: Completed

Power of Choice - Stage 3 DSP Review

Reviewed by:
Date completed:

For all background information on Power of choice review click here.

Power of choiceFor all background information on Power of choice review click here.


On 29 March 2011, the Ministerial Council on Energy (MCE) directed the AEMCPower of choice 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 was 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 was 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, as outlined below.

The Review followed 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

Information Sheet - General

MCE Terms of Reference


The final report and proposed implementation plan were provided to Standing Council on Energy and Resources (SCER), formerly MCE, for their consideration on 30 November 2012.

On 6 September 2012 the AEMC published the draft report for the Power of choice review. The draft report sets out the AEMC’s draft recommendations for supporting market conditions necessary to deliver efficient DSP.

We have also published a number of consultancy reports that were used to guide some of the recommendations in the draft report.

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.

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.


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. 

Synopses and presentations made at those meetings are provided below.


Wording of footnote 232 on page 157 of Australian Energy Market Commission, Power of choice – giving consumers options in the way they use electricity, directions paper, AEMC, 23 March 2012 has been changed to the following:

EUAA, response to AEMC issues paper Power of choice – giving consumers options in the way they use electricity, submission to the AEMC page 9, 26 September 2011: In addition, none of the EUAA’s members reported direct contact from DNSPs seeking DSP capacity.

We apologise to readers for any confusion caused.

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AEMC documents

AEMC documents

Consultant reports

Submissions on Draft Report

Late submissions

AEMC documents

Consultant reports

Submissions on Directions Paper

Late submissions

AEMC documents

Submissions on Issues Paper

Late submissions

AEMC workshop

Stakeholder Reference Group meetings

Public forum