Rule Changes: Completed

Local Generation Network Credits

Reference:
ERC0191
Proponents:
City of Sydney, Property Council of Australia, Total Environment Centre
Decision:
Rule made
Amending rule:
2016 No. 12
Commenced:
15-Dec-2016 , 07-Jan-2017
Amending chapters:
5
Rule version:
87
Other rule versions:
(Schedule 2 only)

Overview

On 8 December 2016 the Australian Energy Market Commission (AEMC) made a final rule determination and more preferable final rule, which would require distribution network service providers (DNSPs) to publish information about expected system limitations. The Commission does not implement ‘local generation network credits’ into the National Electricity Rules (NER).

Overview

On 8 December 2016 the Australian Energy Market Commission (AEMC) made a final rule determination and more preferable final rule, which would require distribution network service providers (DNSPs) to publish information about expected system limitations. The Commission does not implement ‘local generation network credits’ into the National Electricity Rules (NER).

The final rule would require DNSPs to annually complete a ‘system limitation report’ providing the following information:

  • The name or identifier and location of network assets where a system limitation or projected system limitation has been identified during the forward planning period;
  • The estimated timing of the system limitation or projected system limitation;
  • The proposed solution to remedy the system limitation;
  • The estimated capital or operating costs of the proposed solution; and
  • The amount by which peak demand at the location of the system limitation or projected system limitation would need to be reduced in order to defer the proposed solution, and the dollar value to the DNSP of each year of deferral.

The system limitation report will offer consistent and accessible information that will enable embedded generators and other providers of non-network solutions to better use existing mechanisms in the NER.

Requiring DNSPs to include the dollar value of each year of deferral of a proposed solution will:

  • provide the basis for measuring the financial viability of the project at the earliest opportunity;
  • remedy some of the information asymmetry between non-network solution proponents and DNSPs; and
  • provide some balance to the relative negotiating power between DNSPs and providers of non-network solutions, when they negotiate payments for providing network support.

 

Background

On 15 July 2015 the AEMC received a rule change request to amend the NERs from the City of Sydney, Total Environment Centre, and the Property Council of Australia.

The rule change request was for distribution network service providers to calculate the long-term economic benefits that embedded generators provide to distribution and transmission networks, and pay embedded generators a local generation network credit that reflected those estimated long-term benefits.

The AEMC has held a webcast, stakeholder workshops and discussion groups to help inform our assessment of the proposal. Presentations and summaries can be found below.

Watch the webcast.

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Documentation

AEMC documents

AEMC documents

Submissions

Supplementary submission

Late submissions

AEMC Documents

Proposal Documents

Submissions

Late Submissions

Workshop 1 – Identifying the key issues and establishing criteria to assess the proposed solution – 25 February 2016

Discussion group 1 – Participants’ experience setting up embedded generation – 29 February 2016

Workshop 2 - Considering the proposed solution and potential alternatives – 15 March 2016

Workshop 2 – The rule change request – presentation by the rule change proponents – 15 March 2016

Workshop 2 – ISF Preliminary Research Results: Local Network Charges & Virtual Net Metering – 15 March 2016

AEMC documents