The Australian Energy Regulator (AER) has granted regulatory sandboxing trial waivers to VIOTAS and Enel X to expand their participation in the Wholesale Demand Response Mechanism (WDRM). The trials will last for up to 5 years, subject to conditions to protect market integrity and maximise learnings.
The WDRM pays participating large customers to use less electricity when demand is high. This helps lower demand and put downward pressure on wholesale electricity prices during peak periods, which ultimately flows through to lower energy costs paid by all consumers.
Under the National Electricity Rules, only sites with one connection point to the grid can participate in the WDRM, meaning sites with multiple points are currently ineligible. This prevents many large commercial and industrial customers such as manufacturing plants, ports, logistics hubs, water treatment facilities and data centres from taking part.
The trial waivers will allow VIOTAS and Enel X, which provide demand response services to other large commercial and industrial energy consumers, to each trial up to 10 sites with multiple connection points in the WDRM. They will measure the customer response across all connection points to ensure there are genuine demand reductions.
AER Board Member Jarrod Ball said the trial waivers would support new ways to manage peak demand and help the Australian Energy Market Commission (AEMC) consider a rule change request from Enel X to expand the WDRM.
“If successful and scaled, these trials will help reduce the level of investment in the grid needed to manage peak energy demand and put downward pressure on customer bills through reduced wholesale electricity prices.
“The trials will also give the Australian Energy Market Commission examples when it considers the rule change proposal for more large commercial and industrial energy consumers to take part in the Wholesale Demand Response Mechanism.
“We believe allowing both VIOTAS and Enel X to conduct trials will promote competition, help more customers take part and give us a diversity of useful evidence from multiple sites across the National Electricity Market.
“We have attached conditions to support transparency throughout the trials and ensure they deliver these benefits,” said Mr Ball.
Waiver conditions include requirements for all trial sites to be endorsed by the Australian Energy Market Operator (AEMO), for the first two sites to be operating within 6 months, and for VIOTAS and Enel X to report to the AER, AEMO and AEMC every 6 months. VIOTAS and Enel X will also be required to publish non-confidential versions of those reports publicly on their websites.
The VIOTAS and Enel X waivers have been granted under the AER’s regulatory sandboxing function, via the Energy Innovation Toolkit.
This function allows the AER to grant a time-limited trial waiver for eligible trial projects that temporarily exempts an innovator from having to comply with specific laws or rules that may be acting as regulatory barriers to allowing an innovative trial to proceed.
