The Australian Energy Market Commission (AEMC) is taking steps to successfully integrate consumer energy resources (CER) into the National Energy Market (NEM).
CER refers to small-scale energy resources owned by customers, which can produce, store or vary how they use energy. There are new forms of CER such as rooftop solar, batteries and electric vehicles and more traditional assets such as hot water heaters and pool pumps.
Investing in CER empowers consumers to generate, consume, store and trade energy according to their preferences. By using these assets in a smart way, customers can lower their energy bills and should they choose, share the power they generate or vary their consumption in such a way that it supports the overall grid.
The uptake of these resources is progressing at a rapid rate. As it stands, small-scale rooftop solar systems together provide more than 17 GW of capacity across the National Electricity Market - that’s over 4 times the generation capacity of Snowy Hydro.
As a result, the AEMC is working on reform that aims to unlock the full potential of CER – for the benefit of both the customer who invested in those assets and also for the benefit of all customers through the resulting improvements to the operation of the overall system.
Initial views and positions on how to unlock the benefits of CER were outlined in a directions paper, published today. The Commission is considering a rule change request by the Australian Energy Market Operator (AEMO), based on three key areas:
optimising the value of CER flexibility – opportunities for separately identifying and managing flexible CER
flexible trading of CER for large customers with multiple energy service providers
opportunities to improve how energy use is measured for street lighting and other street furniture (such as park BBQs).
AEMC Chair, Anna Collyer, says the effective integration of CER into the market is the linchpin for a successful energy transformation.
“CER, along with other distributed energy resources (DER), such as neighbourhood batteries, are part of the power system and will have an essential role in how that system performs and transforms.
“We are aiming to give customers more ways to use and manage their energy and to create incentives for new businesses to enter the market to help customers get the most out of their energy assets.
“We also want to enable innovative mechanisms to harness the wealth of unused energy from millions of rooftops together with other energy assets within the grid itself, for the benefit of customers with those assets and those without.
“Ensuring that all consumers can benefit from CER assets will be key to achieving a cheaper energy transition while still maintaining reliability,” Ms Collyer said.
Ms Collyer says the rule change will also look at ways to improve flexible trading using multiple energy service providers for large customers. For example, some commercial businesses partner with energy service providers, separate from their retailer, to help them use flexible load, such as refrigeration and air conditioning, as a way of managing their energy costs.
“If we get this right, we can all benefit from these resources, and do so in a way that no one gets left behind. It would also pave the way for the development of an exciting array of tailored products and services that are designed to reward and harness that value,” she said.
The AEMC is not progressing with options for multiple energy service providers to operate at a single residential or small business premise due to current implementation challenges and related costs.
The directions paper also examines low-cost metering options for street furniture including unmetered street lights, with the aim of reducing emissions and improving the efficiency and safety of our public spaces.
With low-cost meters in place, maintenance crews would receive real-time notifications when lights malfunction. This would provide a safer environment for drivers and pedestrians alike.
AEMO’s rule change request is part of a package of reforms we are progressing in collaboration with AEMO and the Australian Energy Regulator to realise the benefits of CER for consumers and the system. A consultation paper we published today explores a proposal for a voluntary mechanism to allow these resources to participate in the wholesale electricity market.
Stakeholders will have 6 weeks to provide feedback in response to the directions paper, with submissions closing on 14 September 2023. The Commission will also hold a stakeholder forum in late September to obtain stakeholders’ insights on progressing options for this rule change.
View the project page for more information and contact details.
Media: Jessica Rich, 0459 918 964, firstname.lastname@example.org.