Demand management incentive scheme and innovation allowance for TNSPs draft determination

Publication date:
22 October 2019
Resource type:

PIAC responded to the Australian Energy Market Commission’s (AEMC) draft determination to extend the Demand Management Innovation Allowance (DMIA) for transmission network service providers (TNSPs).

We support the decision to extend the DMIA and consider it provides a tool for both TNSPs and the Australian Energy Regulator (AER) to explore innovative solutions and share the outcomes to drive long-term reductions in cost. We also consider it allows the AER discretion over which DMIA proposals are allowed to be included in a business’ revenue regulatory framework. 

As similar allowances have already approved for particular TNSPs, we consider formalising such an allowance through the DMIA is beneficial to all stakeholders.

We do not support extending the current DMIS framework as it applies to DNSPs to TNSPs and recommend systemic biases against demand management and other non-network options in transmission planning or more effective ways of delivering prudent non-network alternatives should be investigated separately.

We stress there is a need to build a market for demand response (DR) and encourage the AEMC to explore options for doing so through its Electricity Network Economic Regulatory Framework (ENERF).

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