This thesis examines how government policy can enable an efficient transition to a low-emission power system based largely on renewable generation and storage, and with active demand side participation and customer engagement in the market.

The transition to a renewable power system will involve a significant change in how electricity supply and demand are balanced. Historically, electricity supply from large dispatchable generators was adjusted to meet a largely inelastic demand profile. In the future system, this will be partially reversed with electricity demand responding to price signals, through automation and changes in customer behaviour, to help meet weather-driven electricity supply from a generation mix projected to be largely based on solar and wind generation.

However, truly enabling demand side participation will require a much greater degree of engagement by mass market customers. This is a policy challenge with significant welfare implications because a large subset of residential customers is currently disengaged from the market. [...]