Demand management incentive scheme and innovation allowance mechanism

Sector: 
Segment: 
Status: 
Category: 
Demand management incentive scheme
Date initiated: 
5 August 2016
Effective date: 
14 December 2017
Contact: 
AER General inquiries AERInquiry@aer.gov.au
AER reference: 
58882

Overview

On 14 December 2017, the AER published its demand management incentive scheme (Scheme) and innovation allowance mechanism (Mechanism). The Scheme and Mechanism complement our ongoing reforms targeting consumer choice and more efficient network pricing outcomes. These include our work on tariff reform, metering contestability, ring-fencing and strengthening the transparency and efficiency of replacement expenditure.

The Scheme’s objective is to provide electricity distribution businesses with an incentive to undertake efficient expenditure on non-network options relating to demand management. The separate Mechanism’s objective is to provide distribution businesses with funding for research and development in demand management projects that have the potential to reduce long term network costs.