Two-sided electricity markets? Yes, but...
Much is being made of the benefits of a two-sided electricity market. Indeed, it is one of the cornerstones of the Energy Security Board's proposed market design for the post-2025 electricity market in Australia.
Designing a two-sided market requires policy makers and energy regulators to make assumptions about how consumers will participate in such a market. My submission (here) to the ESB highlights the potential consequences for consumers if these assumptions are found wanting in practice.
The electricity market is a completely manufactured market. Designing it around a narrow textbook view of how consumers behave, will yet again see consumers coming off second best. The Energy Security Board must attend to the lessons of the past 20 years. The introduction of full retail competition, based on naive assumptions, failed all but a few customers. The recent avalanche of regulation (not to mention 'big sticks') was the inevitable consequence of this failure.
As the misquote warns, "Those who do not learn from history are doomed to repeat it."
PhD scholar | energy policy expert using behavioural science to better understand how people engage with energy transitions as human beings not consumers
4 年This is a massive shift in the relationship between consumers and energy providers. The envisaged role sees consults as a sharing responsibility for network reliability and sharing of information the benefits of their privately owned energy resources with other consumers. A major problem at the moment is that consumers are not yet aware of this role or why it is being thrust upon them. There's a lot we can learn from work on social acceptance, which includes market transactions alongside socio-political and community acceptance. Recent research in Australia is revealing the importance to consumers of fairness and achieving collective goals not individual benefits gained at the expense of others. People also want to know why all this is necessary before they consider potential payment plans.
Economist, policy theorist, strategist.
4 年Ron none of the AEMC/ESB commentary is about a two-sided market. It is only about demand side participation in a one-sided market. The difference is more than sophistry. We have had policy statements advocating for demand management of one form or another since at least 1984. Gavin and you are both right though. Getting demand side involvement requires (1) a scheme that rewards consumers for being involved and (2) such scheme being designed for the way consumers actually behave not the way economists argue they should behave.
SVDP / National Director Energy Policy and Research / non Executive Director
4 年Hi Ron ( we already have a 2 sided market with some exporters receiving different outcomes than others do getting different value than others ) and agree all about optimising peoples “agency”for those that want to (with out undermining others) for the more active and for those that want to be passive should be no worse of that the current framework I also think there is a conversation here about should consumer sovereignty / protections apply to production related activities or should there be different obligations - stay safe Gavin