Standardised Demand Flexibility Product Co-design Group
The Standardised Demand Flexibility Product Co-design Group worked with the Authority to develop a demand flexibility product for the wholesale electricity market.
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Role
The Standardised Demand Flexibility Product Co-design Group worked with the Authority from January to June 2026 to develop a standardised demand flexibility product.
The Group was tasked with developing products that support arrangements between buyers of demand flexibility, such as electricity retailers, and sellers, including industrial users and aggregators. The aim was to encourage innovation and make it easier to offer and access demand flexibility services.
This work was identified as a key action in the Energy Competition Task Force's proposed industrial flexibility roadmap and supports recommendation 8 of the Market Development Advisory Group’s Price discovery in a renewable-based electricity system report.
The Standardised Demand Flexibility Product forms part of a broader package of proposed initiatives to reward industrial demand flexibility and support a more resilient electricity system.
To inform its work, the Group considered feedback from an industry survey conducted by the Authority in January 2026. The survey helped identify key opportunities, challenges and priorities for participants across the electricity sector.
Final report
In July 2026 the Group produced a report recommending one wholesale product and two retail products to support greater participation from commercial and industrial end users:
- Callable Spot Price Cap: A standard wholesale product (financial call option) where the buyer pays a premium to the seller. If the wholesale spot price rises above an agreed price and the buyer makes the call, the seller pays the buyer the difference. This provides price protection for the buyer and creates a clear obligation for the seller when prices rise above the agreed level.
- Retail product templates: The report recommends two retail product templates designed to help customers provide flexibility and support the development of flexibility resources that can be traded in the wholesale market:
- Flexibility payment: the retailer pays a customer upfront for the option to request a reduction in electricity use at agreed times. This gives the customer more certainty about the value of investing in demand flexibility.
- Shared savings product: the customer chooses when to reduce electricity use while the spot price exceeds the customer’s contract price and shares the resulting savings with the retailer.
- Flexibility payment: the retailer pays a customer upfront for the option to request a reduction in electricity use at agreed times. This gives the customer more certainty about the value of investing in demand flexibility.
The report includes detailed product specifications, supporting analysis and the reasoning behind the Group's recommendations.
It also identifies some market-related challenges that may need to be addressed to ensure enough retail contracts emerge to underwrite the Callable Spot Price Cap, including market education about the monetary value of flexibility, work needed around baselining and measurement to provide trading confidence and insufficient aggregation capability to help bring C&I flexibility to retail purchasers.
The report also makes recommendations to the Authority and sets out suggested next steps for implementation.
Authority response
The Authority has endorsed the products and the Group’s recommendations and intends to implement them over time. This work includes boosting participation by commercial and industrial customers; helping the emergence of direct supply and aggregation capability; and ensuring market enablers such as education, baselining and measurement are in place.
We will take a phased implementation approach to allow time for foundational market development and will continue to work with industry, where appropriate.
Members
The Group's members were:
- Murray Nash, Managing Director at Zusammen - Chair
- Alister Alford, Enel X Senior Manager, Market Development and Regulatory Affairs
- Antony Oosten, Fonterra Energy and Climate Manager
- Daniel Crawford, Electric Kiwi General Manager Wholesale
- Mike Hall, Simply Energy Senior Commercial Manager
- Mitchell Davis, Orion Group Flexibility and Markets Development Lead
- Paul Morrison, Meridian Financial Product Owner
- Stephen Peterson, Utility Data Services Ltd Director
EECA attended meetings as an observer.