Analysis of stakeholder feedback is underway to inform the AEMC’s final determination on ways to make room on the grid for more solar and pave the way for new technology like home batteries and electric vehicles
Submissions on the draft rule determination Access, pricing and incentive arrangements for distributed energy resources, closed on 27 May. The final determination is due for release next month.
The submissions covered a range of themes with diverse views – including among consumer organisations – about how to improve the value of solar access to the grid in the most equitable way.
The draft rule changes include a package of reforms that for the first time, recognise energy exports as a service provided by distribution networks. Currently there are no financial penalties for poor network export service and no rewards for improvements that make networks more solar friendly. Network ‘traffic jams’, which are getting worse as more people send solar energy into the system in the middle of the day, are costing existing solar owners because they can’t send as much electricity to the grid. If nothing is done these traffic jams will increasingly limit the benefits to current and future solar owners and limit the amount of solar able to be used.
“The reality is that customers overall are not getting the most from the solar we have in the system from homes and small businesses,” AEMC Chair Anna Collyer said.
“We need to design a solution that works for the 2.7 million homes and businesses who have solar – as well as the 10 million who don’t. Future solar owners should be able to share in the same benefits as current owners, existing owners should have choices and those who can’t access or afford solar shouldn’t pay for services they can’t use. The system also needs to be geared to ensure customers make the most from batteries and electric vehicles – we can deliver major benefits for all customers if the right incentives are in place.”
Three rule change requests were submitted in July 2020 by, St Vincent de Paul Society Victoria, the Total Environment Centre jointly with the Australian Council of Social Services (ACOSS), and SA Power Networks to better integrate distributed energy resources like solar in ways that work for everyone.
Under the proposed reforms, distribution networks would be held more accountable for delivering energy exports like solar and stored battery energy more often. This would include finding lower cost ways to do this – such as investing in new technology to better manage the system rather than building more poles and wires. They would also be able to develop options to offer two-way pricing to reward owners of distributed energy resources for sending power to the grid when it is needed and charging them for sending power when it is not – effectively rewarding consumers for minimising costs to the system and only charging them a cents/kWh fee at the times when they added to system costs.
This would be one (but not the only) option networks could use to better match electricity supply and demand, use more of the solar that is generated rather than it going to waste, and shift more renewable energy into the system at peak times when people wake up or come home from work. Matching supply and demand efficiently will lower overall costs.
Under the proposals, if a network wanted to introduce export charging, it would need to consult extensively with customers and have a transition plan, approved by the Australian Energy Regulator, detailing how this would be done. There is no proposal on the table to mandate export charging or introduce blanket fees. Different networks would likely take different approaches because they currently have different levels of solar penetration, different technical needs and different customer mixes.
“We welcome the many voices on these issues and the best way to address them – different perspectives are important. Our public forum in May heard different points of view and now we are considering written submissions to inform our thinking,” Ms Collyer said.
Organisations making submissions included the Australian Energy Regulator (AER), clean energy businesses, industry-related peak representative bodies, power network businesses, generators, retailers and academics.
Submissions were also made by a range of consumer representative organisations such as Energy Consumers Australia, the national, state and territory councils of social services, Consumer Action Law Centre, Total Environment Centre, St Vincent de Paul Society of Victoria, Solar Citizens, Brotherhood of St Laurence, the Public Interest Advocacy Centre (PIAC) and the Energy and Water Ombudsman South Australia (EWOSA).
Submissions received from networks highlighted jurisdictional differences in both the urgency of the reforms and the preferences of different customers. Some, such as Essential Energy, provided details of their own research on community views of how network costs relating to distributed energy resources should be recovered.
Further written feedback from private individuals is also being considered. A final determination is due to be handed down in July.
Media: Kellie Bisset M: 0438 490041
About the AEMC
The Australian Energy Market Commission is the rule maker, market developer and expert adviser to governments on energy. It protects consumers and achieves the right trade-off between cost, reliability and security.