Market Review: Open
Overview
The Australian Energy Market Commission is reviewing the wholesale demand response mechanism (WDRM).
On 10 July 2025, the AEMC published a draft report, outlining two draft recommendations for the WDRM: that the WDRM should continue operating; and that the Expanding eligibility under the WDRM rule change request be initiated.
Stakeholder submissions on these draft recommendations are being accepted until 14 August 2025.
The WDRM has a role in the NEM
The WDRM is the only market mechanism in the NEM wholesale market that facilitates demand response, that is, payment for reducing load. It is also the only mechanism that allows non financially responsible market participants to participate in the electricity market.
These features benefit some electricity users and enable their demand response participation to be effectively incorporated into market outcomes, which benefits all electricity consumers.
Two-sided market reforms are the main vehicle for demand-side participation
The AEMC maintains its commitment to reforms that move the national electricity market (NEM) towards a two-sided market. The recent Integrating price-responsive resources into the NEM (IPRR) and Unlocking CER benefits through flexible trading (CER benefits) final rules have helped enable this shift.
Through the combination of these two reforms, participants can separate flexible and inflexible resources behind a connection point and participate in the wholesale market with the flexible or controllable resources. As a result, these two reforms provide a flexible and robust method for demand-side participation in the NEM dispatch process for many electricity users.
While dispatch mode, introduced through IPRR, is the key vehicle to facilitate broad demand-side participation, the WDRM can provide important additional benefits alongside dispatch mode.
The WDRM allows demand response to be offered into the NEM
The WDRM was established through a rule made on 11 June 2020 and commenced operation on 24 October 2021. It enables demand response service providers (DRSPs) to offer demand response into the NEM, where it can be dispatched in the same way as generators.
Submissions to the draft report are due 14 August 2025
Written submissions responding to the draft report must be lodged with AEMC by COB Thursday 24 April 2025 via the AEMC website, www.aemc.gov.au. Please use the project code EPR0099 when lodging a submission.