Preparing markets for technological change

03 December 2015

The AEMC today released a final report on the regulatory implications of storage integration in the electricity sector.

Storage technologies are not new, and some have been used in Australia’s energy markets for decades. What is new is that technological advances, particularly in battery storage, are making storage devices cheaper and more accessible to a wider range of electricity consumers.

In October 2015 the Commission sought stakeholder views on the ability of the existing regulatory framework to support the integration of storage technologies across the electricity sector.

With this input, the AEMC has identified a number of regulatory issues that may be acting as a barrier to the installation, connection and operation of storage technologies by consumers and businesses.

The Commission’s analysis is founded on the principle that consumer choices should drive energy market development. Utilising the competitive market frameworks currently in place will allow consumer preferences to drive how the sector develops. A consumer-led deployment of storage is not necessarily orderly, but allows consumers to make decisions that reflect their own needs and preferences.

While the existing regulatory framework, and associated processes for developing it, can largely accommodate the installation of storage, the Commission has made a number of recommendations designed to:

  • establish a level playing field by clarifying how regulated network businesses can use storage to meet network needs;
  • remove barriers to parties using storage capability to participate in the National Electricity Market, for example by selling electricity into the wholesale market or providing ancillary services;
  • simplify and streamline the process for the connection of storage capability to the electricity network, both behind the meter and on the grid itself; and
  • clarify that the optimisation and control of storage functionality should, except for system security and safety reasons, be determined through market-based signals.

The AEMC will work collaboratively with AEMO, the AER and other stakeholders to progress the recommendations.

The project is part of the Commission’s technology-focused work program to understand how technological change may affect the National Electricity Market and develop regulatory arrangements that continue to support flexible and resilient markets.

Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817