The challenge

Fair value for energy consumers

Energy Consumers Australia (ECA) is an independent organisation created by the Council of Energy Ministers to independently advocate on behalf of energy consumers through evidence-based advice.

ECA engaged Rennie to undertake national and international research on market settings that would enable consumers to receive fair value for the services they can provide in the National Electricity Market (NEM) using consumer energy resources (CER). ECA intended to use this work to inform its engagement with the NEM wholesale market settings review.

Our solution

Targeted research and analysis into market settings

Rennie conducted targeted research, commencing with a scan of international and state markets to identify settings and models that allow CER to participate in grid services and load management. Through stakeholder engagement, Rennie gathered views on participation motivations, barriers, potential solutions and consumer engagement. Rennie then developed a report summarising the findings, which was used for ECA to engage with the NEM Review and other consultations.

Our impact

Recommendations to boost CER participation in markets, for the benefit of all energy consumers

Rennie developed a detailed report and presentation, setting out priority recommendations and supporting actions to promote CER participation in markets, backed by case studies on CER participation mechanisms and initiatives applied in other international and state jurisdictions (California, PJM, UK, France, WA), and considerations for how these could be implemented in the NEM. The report also set out the key insights on CER integration challenges and opportunities gleaned from stakeholder engagement with leading DNSPs, the Australian Energy Market Commission (AEMC) and aggregators.

Aspects of the priority recommendations are reflected in the recommendations of the NEM wholesale market settings review for greater CER integration into the wholesale market, and in the national Consumer Energy Resources Taskforce’s considerations for roles and responsibilities to support a high CER future.

Key insights

• Increased participation of CER in wholesale markets and grid services has the potential for significant system and consumer benefits. Independent studies have estimated that effective integration of CER could lead to reduced generation and storage costs in the order of $10b to $20b. 
• With the correct market and regulatory settings, CER participation in wholesale markets and grid services could result in benefits for CER owners, as well as lower system costs and electricity prices for all consumers.
• Increased participation by more households in CER technologies can also provide social benefits, improving social licence and reducing cross-subsidies that may be borne by vulnerable consumers.