On 11 December 2012, the AEMC published its final advice on its review of the energy market arrangements for electric (EVs) and natural gas vehicles (NGVs). This review was aligned with the AEMC’s power of choice review. View more
On 11 December 2012, the AEMC published its final advice on its review of the energy market arrangements for electric (EVs) and natural gas vehicles (NGVs). This review was aligned with the AEMC’s power of choice review.
We found that while the energy market arrangements are generally robust to cater for the efficient uptake of EVs, it is important to put measures in place now to facilitate efficient investment for both consumers and service providers in the long term.
In general, we considered that no specific energy market arrangements should apply to EVs. An EV is a potentially large load (between 2 to 4 MWh per year) and should be treated as another form of demand side participation (DSP). We also assessed whether there were appropriate consumer protections in place for residential consumers.
In relation to EVs, we recommended that:
- To facilitate efficient EV charging behaviour, appropriate pricing signals (particularly network pricing signals) are necessary to reflect the cost of supplying electricity. As stated in our power of choice review, we proposed that cost reflective network pricing be phased in through a banding approach, with medium to large consumers transitioned to efficient and flexible network prices to begin with (for large residential and small business consumers such network prices would be mandatory). This should be set to capture a high proportion of EV consumers.
- To enhance the choices in terms of products and services available to consumers, we devised new metering arrangements that should enable a consumer to:
- separate their EV consumption from their household consumption;
- have multiple service providers at a connection point; and
- install EV charging infrastructure in commercial properties (eg. Shopping centres and business parks).
- Specifying principles and conducting further work in relation to load management should help consumers engage in controlled EV charging.
- The National Energy Retail Law (NERL) should be reviewed by SCER to remove ambiguity in relation to the sale of electricity.
- The AER should review its exemptions framework to cater for commercial EV charging.
In relation to NGVs, we found that no changes need to be made to the energy market arrangements to facilitate the efficient uptake of these vehicles.
Request for Advice
On 28 July 2011, we received a Request for Advice from the Ministerial Council on Energy (now the Standing Council on Energy and Resources) regarding the Energy Market Arrangements for Electric and Natural Gas Vehicles. The Request for Advice required that we identify the energy market arrangements that would facilitate the economically efficient uptake of EVs and NGVs.
We were required to provide this advice in a manner that promotes the National Electricity Objective and National Gas Objective. This required us to identify the costs and high level benefits on the energy market arrangements brought about by the efficient uptake of EVs and NGVs.
This Request for Advice applied to EVs that connect to the electricity system; namely, plug-in hybrid electric vehicles and battery electric vehicles. This Request for Advice also applied to NGVs; namely, vehicles that relied upon compressed natural gas and liquefied natural gas.
We separately considered the electricity and gas markets, including Western Australia's electricity market, while we noted any overlapping energy market issues. The technological, environmental and economic aspects of EVs and NGVs were not expected to be addressed unless considered necessary.
The Commission noted that this Request for Advice interacted in parallel with its Power of Choice review.
On 22 September 2011, we published our Approach Paper in relation to this Request for Advice. The Approach Paper described our analytical framework, identified key issues and canvassed a series of questions for consultation. Submissions were due by 27 October 2011. We received 20 submissions in total.
On 18 January 2012, the AEMC published its Issues Paper in relation to this Request for Advice. Submissions were due by 23 February 2012. We received 29 submissions in total. We also published a report by AECOM on the impact of Electric Vehicles and Natural Gas Vehicles on the Energy Markets.
Electric Vehicles and Metering Workshop
On Wednesday 29 February 2012, we held an ‘Electric vehicles and metering’ workshop in Sydney. The synopsis of the workshop and presentations made are available below.
Metering Workshop for the Power of Choice review and Electric Vehicles review
On 16 May 2012, we held a metering workshop for the Power of Choice and Electric Vehicle review in Melbourne. At the workshop we discussed:
- Draft set of metering principles in the NEM to facilitate demand side participation, including EVs; and
- Incentives for a commercial or regulated roll out of interval or smart meters.
Publication of AECOM’s Final Advice
On 31 May 2012, the AEMC published the Final Advice by AECOM (an economic consultancy) entitled ‘Impact of Electric Vehicles and Natural Gas Vehicles on the Energy Markets’.
AECOM’s Final Advice presented its findings in relation to the:
- estimated uptake, using a scenario approach, of electric vehicles (EVs) and natural gas vehicles (NGVs) until 2030 in the NEM and Western Australia’s SWIS;
- estimated impact of EVs on peak demand (in MW) and costs (in terms of network and generation upgrades) of EVs under a set of EV charging scenarios in the NEM and Western Australia’s SWIS;
- high level benefits of EVs on the electricity market;
- estimated impact of NGVs on the gas markets; and
- stakeholder submissions on AECOM's Initial Advice.
AECOM’s Final Advice contributed to the AEMC’s Review.
On 29 August 2012, the AEMC published its draft advice on this review. The draft advice canvassed our recommendations for changes to the energy market arrangements to facilitate the efficient uptake of EVs. We did not propose any changes to the energy market arrangements for NGVs. Submissions were due on 1 October 2012 and 19 submissions were received.View less