AER releases outcome of Demand Management Incentive Scheme for 2020–21 and 2021–22 reporting years

The Australian Energy Regulator (AER) today released its assessment of its Demand Management Incentive Scheme (DMIS) for Ausgrid, AusNet Services and United Energy. This assessment is for the 2020–21 and 2021–22 reporting years.

The AER has approved a total of $594,590 of financial incentives for these distributors due to their efforts to deliver demand management projects to address network constraints and defer network expenditure.

The distributors will obtain these rewards because of the implementation non-network solutions such as use of temporary generation during peak demand time, residential air-conditioner load control and customer demand response.  

The DMIS encourages demand management projects that are efficient and contribute to resolving a network constraint. In deciding if a project is efficient, the AER requires distributors to test the demand management services market. This increases transparency, promotes competition, and puts downward pressure on electricity prices.

For more detailed information about the projects, please refer to each distributor's DMIS report.


The AER introduced a new Demand Management Incentive Scheme (DMIS) in December 2017 to encourage electricity distribution network service providers (DNSPs) to find lower-cost alternatives to investing in network capital expenditure. The DMIS will incentivise DNSPs to undertake efficient expenditure on non-network options focusing on demand management.

The publication of DNSPs' annual compliance reports assists the AER in identifying any need to change the magnitude of the cost uplift in a future version of the scheme and provide transparency to enhance understanding how different DNSPs are:

  • estimating, accounting for and realising the benefits of demand management
  • providing demand management as an input for distribution network services, and subsequently accruing financial incentives under the scheme
  • proactively tendering for another legal entity to provide demand management services
  • undertaking demand management in-house in a manner that is compliant with the ring-fencing guideline
  • utilising demand management in different ways to meet their unique network needs.
Issued date: 
18 May 2023
AER reference: 
AC 50/23
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