MEDIA RELEASE: Experts find reform required to unlock the demand side in future energy markets 10 September 2025
A new independent report released today sets out a broad set of changes necessary to unlock the potential of the demand side in the National Electricity Market (NEM). The report, NEM Reform: Unlocking the demand side in future energy markets, comes in the wake of Draft Report of the NEM Wholesale Market Settings Review Expert Panel, which highlighted the importance of more demand-side resources actively participating in the NEM to drive down total system costs and bills for consumers.
Commissioned by the Energy Efficiency Council with support from RACE for 2030, the report’s authors – independent expert Dr Gabrielle Kuiper and Dr Dylan McConnell from UNSW Sydney – the report finds that driving up demand side participation will require the coordinated development of deployment mechanisms, regulations and markets.
The authors propose several reforms to increase the role of demand-side resources in the NEM, including:
- encouraging the growth of a competitive market for aggregation services in the spot market through reforms of mechanisms including the Wholesale Demand Response Mechanism and the upcoming ‘dispatch mode’ to be introduced through the Integrated Price Responsive Resources rule change;
- innovation in products in the medium-term derivatives markets and long-term investment markets to support demand side participation;
- a comprehensive review of the economic regulation of distribution networks, to level the playing field between investments in network infrastructure and ‘non-network solutions’; and
- retooling energy efficiency schemes that sit adjacent to the wholesale market to ensure alignment across mechanisms for deploying and activating demand side resources.
“We’re at an important moment in which government, market bodies, industry and consumers are all taking a step back and considering how to set up our energy markets to drive efficient investment in a twenty-first century energy system,” said Luke Menzel, CEO of EEC.
“Gabrielle and Dylan’s independent analysis points to some fundamental principles for reform – to get the best outcomes for consumers we need to level the playing field between the demand side and the supply side of our energy system, and we need to ensure emerging participants and business models are allowed to compete with incumbents”.
“These are principles that are reflected in the NEM Review interim report, but there is still work to do to ensure that the detailed reform agenda actually enables the kind of competition that will deliver an affordable energy transition.”
“Demand-side participation is critical for efficient, reliable electricity markets. The NEM Review provides a key opportunity to address the supply-side bias in institutional arrangements and market design which prevents demand-side capacity from competing fairly with supply-side resources,” said Dr Bill Lilley, CEO of RACE for 2030.
This report draws on both international best practice and a detailed understanding of the NEM and sets out design principles and recommendations to unlock the potential of the demand side and ensure its meaningful integration into the future high variable renewable energy electricity system”.
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Download the report here.
Media enquiries:
EEC | James Pound | 0420 253 650 | info@eec.org.au
RACE | Ori Papadopoulou | 0422 612 136 | ori.papadopoulou@racefor2030.com.au
About the EEC
The EEC is a not-for-profit membership association for businesses, universities, governments and NGOs. The EEC works to build sophisticated markets for energy management products and services that deliver a prosperous, net zero Australia with:
- Affordable, reliable energy;
- Healthy, comfortable buildings; and
- Productive, competitive businesses.
About RACE for 2030
RACE is the cooperative research centre for the energy and carbon transformation.