An Overview of Demand Response Opportunities for Commercial and Industrial Customers in the Australian NEM

Different demand response (DR) mechanisms available in the Australian national electricity market (NEM), such as wholesale, ancillary, emergency, and network DR could provide significant flexibility to maintain and enhance power system security and reliability. Australian Energy Market Operator (AEMO) is continually reviewing global practices working with different states and territories, and revising the legislative and technical requirements for integrating more DR participants into the national electricity market (NEM). Commercial and Industrial (C&I) customers have a higher potential to participate in DR with flexible larger loads and onsite distributed energy resources (DERs). The C&I customers can reduce their energy bills and earn incentives from operators through DR participation. This paper provides a comprehensive review of different types of DR mechanisms that have been used in the Australian NEM. Technical and legislative requirements to participate in DR for C&I customers have been identified and summarised. Furthermore, the challenges for DR participation and potential benefits have been highlighted. Finally, a look-up table is prepared to identify the suitability of C&I customers to participate in one or multiple DR mechanisms potentially. The findings of this paper can be used as a guiding tool for C&I customers to understand technical and legislative requirements for participating in different DR mechanisms in Australia and select the most appropriate DR mechanisms for maximising their benefits.