• This reduction in electricity usage will help make the power grid more reliable.
  • Initially, the move will be introduced for big businesses with high electricity usage and will slowly be extended to households and small businesses.
  • Environmental groups in the country have called this a welcome change and a positive route to reducing carbon emissions.

A radical change is set to be introduced in the electrical industry in Australia from next year where consumers will be paid for lessening their power usage. This is also known as “wholesale demand response” where electricity users are paid for reducing power demands without having to pay electricity generators to increase supply.

This change has been bought into effect by the Australian Energy Market Commission (AEMC) that has defined this change as a necessary reform to the National Electricity Market (NEM). This change happened despite resistance from big energy producers of electricity that were looking to push these changes to next year citing the COVID-19 crisis as a reason for delay.

The AEMC says that this rule change will reduce the price of electricity consumption for the consumers and will help increase the reliability of the power grid by competing with electricity generators that receive high monetary returns during times of heavy demand.

Through this change, large electricity users will bid for reductions to be made and get paid for retracting demand from the system. The AEMC has said it will not be extending this scheme to households and small businesses at this time and this change will occur only over a period of time.

Angus Taylor, the Energy minister revealed that the reliability of the electricity grid will be improved once the new rules come into play. He said that the reform will prevent the occurrence of unexpected blackouts due to spikes in electricity usage that are responsible for increased electricity prices. He called this as a great opportunity to reward energy industries such as smelters for the part they play in making the grid reliable and affordable. He also added that lower expenditure on electricity will mean that the Australian businesses will be able to spend on expansions and job creation particularly at this difficult stage to recover from the COVID-19 crisis.

This change in the electricity industry is also a welcome boost for environmentalist groups across the country. Rod Sims, Chairperson of the Australian Competition and Consumer Commission (ACCC) said that this change will limit additional electricity generation which will lead to low electricity prices. Craig Memery, the Head of Energy Policy at the Public Interest Advocacy Centre also called this as a welcome reform which will bring benefits to customers and make them a part of a secure, zero-carbon energy system.

Source Credits: https://www.abc.net.au/news/2020-06-11/customers-paid-for-reducing-electricity-demand-radical-change/12343790