The AEMC has made a final rule determination, and a final rule, that provides a process by which the Australian Energy Market Operator (AEMO) may obtain information on demand side participation from registered participants in the National Electricity Market (NEM).

Currently, AEMO conducts voluntary surveys of registered participants regarding their knowledge of demand side participation that may occur in the NEM. It appears that the quality of information obtained from the survey method is limited. This, in turn, may impact on the quality of AEMO's electricity load forecasts.

The final rule, which is a more preferable rule to the proposed rule, seeks to address the potential information deficiency experienced by AEMO. Registered participants in the electricity market will be required to provide information on demand side participation to AEMO, in accordance with guidelines. The final rule requires AEMO to develop these guidelines, in consultation with registered participants and interested stakeholders. AEMO will be required to have regard to registered participants’ reasonable costs of efficient compliance with the guidelines compared to the likely benefits of the use of that information by AEMO in forecasting load for the purposes of the exercise of its functions under the National Electricity Rules. This provides an opportunity for registered participants and other interested stakeholders to actively engage with AEMO on the appropriate specification of the guidelines.

The final rule requires AEMO to take the information it receives into account when developing and using load forecasts for the purposes of the exercise of its functions under the National Electricity Rules. This could lead to potential improvements in the quality of AEMO’s load forecasts, and so inform a number of AEMO’s decisions and processes. Further, the publication of potentially better quality load forecasts by AEMO could better inform electricity market stakeholders of possible future outcomes. This could lead to potentially more efficient operational decisions and, ultimately, potentially more efficient investment decisions.

The final rule requires AEMO to publish details, no less than annually, on the extent to which the information received has informed the development or use of its electricity load forecasts.

Under the final rule, AEMO is required to develop and publish the guidelines by no later than 26 September 2016. Also, a minimum three month transition period applies between the dates for publication, and commencement, of the guidelines.

 Background

This rule change is part of the Commission’s work to encourage greater demand side participation by consumers in Australia’s energy markets, based on the 2012 Power of Choice review.

Demand side participation provides consumers with a suite of options to manage their electricity consumption and, in turn, their expenditure.

On 11 September 2014, the AEMC published a consultation paper and commenced consultation on this rule change request, which was proposed by the Council of Australian Governments’ (COAG) Energy Council. In response, 10 submissions were received from stakeholders.

On 18 December 2014, the Commission published a draft rule determination, including a draft rule, for this rule change request. Submissions closed on 12 February 2015. The Commission received 10 submissions from stakeholders.