The benefits of a two-way energy supply

What does a two-sided energy market mean, and how does it impact the way people use and pay for their power?

8 min read
Over the past few years, Australia has started to move toward a two-sided energy market. What does this mean, and how does it impact the way you use and pay for power?

Electricity markets have traditionally been one-sided with customers like you passively participating. In general, that means you’ve agreed to pay a certain rate for your electricity. You don’t worry about the real-time price fluctuations in the market. For the most part, you just flip on your lights or run your dishwasher or air-con and pay a monthly bill based on how much energy you’ve used. 

But that’s no longer the case here in Australia. In late 2019, the Australian Energy Market Commission said the country needs to prepare for a two-sided energy market. And it could have huge benefits for you. 

One-way traffic

Traditional one-sided energy markets were generally built on traffic power – from generators to paying customers. 

Demand on the energy network rises and falls throughout the day. As more people need to use electricity from the grid, electricity generators around the country offer to supply more power to meet this demand.

This is where real-time price fluctuations come into play. During peak times, such as the evening when many people are cooking dinner or running their appliances, increased demand for energy causes prices to rise, which encourages more energy generators to offer their services. 

What does a two-sided energy market look like?

A two-sided energy market gives you the chance to play a more active role in the Australian energy network. It’s not only the energy retailers who adapt to changes in peak-time energy prices, you also play a role in meeting fluctuating energy demands – and get rewarded for doing so. 

That’s cool! How do I get involved?

In a nutshell, technology! Solar panels and solar batteries are one great example. Capturing your own energy means you don’t always have to pay for energy from the grid. And with the help of programs such as the AGL virtual power plant (VPP) you can become part of a pop-up power plant within the network.  

The VPP is a cloud-based system that connects individual solar batteries from different households and businesses and sends excess solar power out to the network for others to use. This collection of batteries works together to ease the demand on the grid for the greater good of the community. 

Smart home technology also makes it easier for you to help with peak-time energy use. Using your smart assistants to set your appliances to only run during off-peak times is another way you can help put less pressure on the grid. 

Girl dancing in the sun with solar pnels on roof of house

And what are some of the benefits of the two-sided energy market?

Generally, it gives you more control over how and when you use energy. You can take advantage of more sustainable energy options and save money by buying less power from the grid.  

By joining programs like the VPP, you’re supporting the energy network with the excess solar power you capture and feed into the grid - and you'll be paid for this!

This helps reduce the community’s reliance on coal-fuelled power – replacing it with Aussie sunshine.

If you don’t have solar power, you can join a demand response program, such as our Peak Energy Rewards program. Essentially, you’re rewarded with bill credits for reducing your energy usage during certain times. We also have a Commercial and Industrial Demand Response program for larger organisations to enable those organisations to respond to peak events in a way that is tailored to their business and operations (such as shifting energy usage to off-peak times).

Teamwork makes the two-sided dream work

Consumers, retailers and the market operator all need to continue working together to firmly establish the two-sided electricity market.

Retailers are empowering consumers to take this more active approach through efforts such as energy orchestration and demand response programs. And market operators and retailers will have to find the best way to use energy from customers to maintain a balanced and operational grid. This will require quality data and transparency from improving technology such as smart meters. 

Helping shape the future 

We fully support a two-sided electricity market and it’s why we continue to work closely with the Energy Security Board on its Post-2025 Electricity Market Design. Together, we can all work toward a more collaborative energy network that empowers and rewards customers for their participation.

Adelaide content shoot - Adam - 2021

Stay on top of your energy use with the AGL app

The AGL app lets you manage your accounts on the go. View your usage, check your bills and manage your account, straight from your phone.

Discover more