The AEMC today released its draft advice on implications for energy market arrangements from the introduction of electric and natural gas powered vehicles. In preparing this draft advice the AEMC commissioned a study by economic consultancy firm, AECOM, that found that each electric vehicle (EV) could impose additional network and generation costs of up to $10,000 per vehicle over the period of 2015 to 2020 in the absence of appropriate signals.

AEMC Chairman, John Pierce, said today that each electric vehicle could result in additional generation and network costs that under current market arrangements only a small proportion of which would be borne by the EV consumer.

While energy market arrangements are capable of incorporating electric and gas vehicles, promotion of efficient investment by both consumers and service providers in EVs requires some changes to electricity market arrangements.

“It is important that we focus on the lowest cost solutions to deal with the community’s demands for electricity in the years to come,” Mr Pierce said.

Today’s draft advice on energy market arrangements for electric and natural gas vehicles calls for further consultation on a number of recommendations before the review presents its final advice to state, territory and federal energy ministers in November 2012.

“To facilitate efficient market outcomes in relation to electric vehicles we recommend that pricing signals (particularly network pricing signals) should reflect the underlying cost of supplying electricity.

“This will allow consumers to make informed decisions about charging that will provide the opportunity to reduce their bills in the short term and avoid the need for investment that would otherwise be required over time to serve rising demand,” Mr Pierce said.

The draft report found that efficient electric vehicle charging and consumer choice would be promoted by development of new metering arrangements in the market.

The draft report found no significant changes need to be made to market arrangements to cater for the uptake of natural gas vehicles.

Issues raised by the electric and natural gas vehicles review are also being examined by the AEMC’s major review called power of choice – which looks at better ways to manage energy consumption across the entire electricity supply chain.

The power of choice review will develop recommendations on how the market could work towards more cost reflective prices for all large loads and demand side participation.  Cost reflective prices will be an important contributor to EV owners’ charging decisions.

Submissions on the draft advice are due by 1 October 2012


For information contact:

AEMC Chairman, John Pierce (02) 8296 7800

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


29 August 2012