The Australian Energy Market Commission has initiated a review of the wholesale demand response mechanism (WDRM). This review will examine the costs, benefits and effectiveness of the WDRM to determine whether it should remain, be changed or phased out.

The review will consider the future of the WDRM

This review is required under Chapter 3 of the National Electricity Rules (NER) and will consider the WDRM's role in enabling demand-side participation and its performance to date.

Stakeholder feedback and analysis will inform the Commission on the future role for the WDRM.

In establishing the WDRM, the Commission considered that if there was a move to a two-sided market, this should replace the WDRM. The Commission’s recent rules through Unlocking CER benefits through flexible trading and Integrating price-responsive resources into the NEM, have progressed these two-sided market arrangements.  

This review will evaluate whether these recent market reforms have reduced or removed the need for the WDRM or whether the WDRM still plays an important role in facilitating demand-side participation in the NEM.

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.  

There has been limited participation in the WDRM relative to what was anticipated in 2020.  

Submissions to the consultation paper are due 24 April 2025

Written submissions responding to the consultation paper 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.