Sydney, ANZAC and Glebe Island Bridges, Sydney - photo Marghanita

Ecologically Sustainable Sydney


Consumer Discretion in Energy Use

Consumers have limited discretion in their energy use.

Call for Comment on Discussion Paper

The AEMC is calling for comment on AEMC 2011, Power of choice - giving consumers options in the way they use electricity, Issues paper, 15 July 2011, Sydney by 26 August 2011. Extracts of the discussion paper are provided below.

On 29 March 2011, the Ministerial Council on Energy (MCE) directed the AEMC to undertake a review of DSP [demand side participation] in the National Electricity Market (NEM). ...

Cost effective DSP has the potential to improve the efficiency of the electricity market, for example through more efficient utilisation of transmission and distribution networks and providing added competitive discipline on retailers. This should result in lower costs to consumers for an equal level of reliability of supply. Wider benefits may include improved environmental quality (i.e. lower greenhouse gas emissions) and other benefits consistent with the broader policy objectives of government. ....

Chapter 4 Consumer participation and DSP opportunities

5. What are considered the drivers behind why consumers may choose to change their electricity consumption patterns? Please provide examples or evidence where appropriate.
6. Chapter 4 lists some plausible DSP options that are currently used or could be used by consumers. Are there any other plausible DSP options currently used by consumers that have not been identified? Please provide description of measures and examples, where available.
7. Are there any DSP options that are currently available to consumers, but are not commonly used? If so, what are they, and why are they not commonly used (i.e. what are the barriers to their uptake)? Please provide examples and evidence if available.
8. Are there other DSP options that are not currently available to consumers, but could be available if currently available technologies, processes or information were employed (or employed more effectively) in the electricity (or a related) market?

Chapter 5 Market conditions required for efficient DSP outcomes

9. What are considered the relevant market conditions to facilitate and promote consumer take up of cost effective DSP?
10 Are there any specific market conditions which may need to be in place to enable third parties to facilitate consumer decision making and capture the value of flexible demand? Please provide examples and evidence as appropriate.
11. What market conditions (technologies, processes, tariff structures, information etc) are needed, that are not currently employed in the electricity market, to make other DSP options available to consumers?


12. Do you consider retail tariffs currently reflect the costs to a retailer of supplying consumers with electricity?
13. Are any changes needed to retail price regulation to facilitate and promote take up of DSP?
14. Do the charges to retailers for use of transmission networks reflect the value of that use?
15. Do the charges to retailers for use of distribution networks reflect the value of that use?
16. Do all consumer groups, including vulnerable consumers benefit from having cost reflective prices in place? If not, are any special provisions required to protect certain classes of consumers?


17. To what extent do consumers understand the how they can reduce their electricity bill? What information do consumers need in order to increase their understanding of how they can reduce and manage their electricity consumption and hence bills?
18. What issues are associated with provision of existing information in the market? Are there arrangements that could improve delivery of such information? If so, how and by whom?
19. Could better information be provided to consumers regarding the actual consumption of individual appliances and pieces of equipment? If so, what information could be provided and in what form?

Pricing options, products and consumer incentives

20. Are retailer and distributor business models supportive of DSP? 21. What incentives are likely to encourage research and development of other parties to promote efficient DSP? 22. Are there any regulatory, cultural or organisational barriers that affect take up of DSP opportunities? 23. What form of commercial contracts/clauses are required for facilitating and promoting efficient DSP?

Incentives to invest and access to capital

24. Are there specific issues associated with investment in infrastructure needed for consumers to take up DSP opportunities?
25. Do you consider that the issue of split or misaligned incentives has prevented efficient investment in DSP from taking place?
26. What are potential measures for addressing any issues associated with split or misaligned incentives?
27. Are there specific issues concerning ease of access to capital for consumers and other parties?

Technology and system capability

28. What are the significant energy market challenges in optimising the value of technology and system capability to facilitate an efficient level of DSP?
29. Do current technology, metering and control devices support DSP? If not, why not, and what are considered some of the issues?
30. How can issues relating to weak and/or split incentives be addressed to ensure that the benefits of smart grid technologies are aligned and felt across the electricity supply chain, including by consumers?
31. How can pricing signals/tariff arrangements be made complementary with smart grid technologies to facilitate efficient DSP in the NEM?
32. In maximising the value of technologies, such as smart grids for DSP, what are the issues relating to consumer protection and privacy?

More in Source: Issues Paper [PDF, 1360KB] available at Announcements:Issues paper on consumer choices and efficient electricity consumption 15 July 2011

"Electricity prices - why our power bills are going up and whether anything can be done about it? " - Transcript Powerplay SBS Insight © Ramin Communications 2011. Last modified 29 Nov 2013.