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Updated requirements for restoring the power following a black system event in Queensland

28 January 2021

The Australian Energy Market Commission’s Reliability Panel has published a final determination on amendments to a key standard used to restore the power system after major disruptions in Queensland.

System restart ancillary services (SRAS) are services that the Australian Energy Market Operator (AEMO) procures to help re-energise parts of the power system affected by a major supply disruption or black system event. Major supply disruptions and black system events are rare events. The most recent black system event was in South Australia in September 2016. Prior to that event, two more have occurred in; northern Queensland in 2009; and New South Wales in 1964.

SRAS are provided by facilities that can either self-start without drawing power from the network or can support the stable restoration of the power system following its initial re-energisation. Once an SRAS provider has restarted its own plant, it provides energy to restart other generators and commence the processes required to restore the power system. This process is then carefully managed by AEMO, networks and other generators so that power is restored to customers as quickly as possible.

The Reliability Panel’s final determination specifies targets which will allow AEMO to procure SRAS for a single Queensland region.  

This draft determination follows a decision by AEMO to combine the existing North and South Queensland sub-networks into a single Queensland sub-network for SRAS procurement purposes. The Panel’s final determination includes a locational requirement for AEMO to procure SRAS north of Bundaberg in addition to targets for the speed, level, and reliability of restoration in Queensland as a whole. 

The Panel’s amendments to the Standard’s targets will guide AEMO's procurement of SRAS for a single Queensland sub-network in its next procurement round in early 2021. 

Media: Kellie Bisset, Media and Content Manager, 0438 490 041

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System restart services, standards and testing

AEMO SRAS Guideline review page

Proposed changes to make energy switching easier for life support customers

06 August 2020

The Australian Energy Market Commission is seeking input on a proposal to help consumers needing life support equipment such as kidney dialysis machines to shop around for better deals.

The consultation follows a request from the Energy and Water Ombudsman of New South Wales (EWON) to remove barriers to energy switching for people who need life support equipment.

Under current rules, in some situations, when life support customers move homes or change retailer, they need to provide a new medical certificate.

EWON considers that the costs of securing a new medical certificate each time may deter life support customers from switching.

EWON has requested changes to the National Energy Retail Rules (NERR) to allow outgoing retailers or distributors to share relevant medical information with a new retailer or distributor selected by the customer.

The consultation paper explores EWON’s proposed solution, the issues and implementation challenges. The AEMC has long advocated for giving consumers options in how they use energy and allowing them to actively engage with the retail energy market by shopping around for the best value-for-money deal. We will explore the issues and invite stakeholders to provide feedback on the consultation paper by 3 September 2020.

 

Media: Kellie Bisset, Media and Content Manager, 0438 490041

AEMC starts annual review of the electricity network economic regulatory framework

04 June 2020

The AEMC is today commencing its annual review of the electricity network economic regulatory framework (2020 Review).

In this year’s review, we will identify a priority list of issues relevant to the electricity sector's transformation that may require attention or reform – beyond the integration of distributed energy resources – as the electricity sector transformation continues.

Last year’s review of the future of the electricity grid focussed intensively on distributed energy resources and detailed a series of key recommendations and actions required to integrate the increasing uptake of distributed energy resources into the national electricity market (NEM) in ways that benefit everyone who uses the power system.

There is a significant program of work under way to integrate distributed energy resources into the electricity system and many of the recommendations from last year’s review have also commenced.

With all this work underway, it is timely for us to engage with stakeholders on other emerging issues.

The review will also provide an update on the implementation of recent reforms and report on the AEMC's monitoring of network businesses' key performance indicators.

An approach paper has been released today explaining the AEMC’s approach for this year’s review and seeking your feedback on issues we propose to consider as part of the 2020 Review.

Those issues include:

  • Dealing with large transmission investment and contingent projects in the context of AEMO’s Independent System Plan (ISP)
  • Risk allocation between distribution networks and consumers
  • The need for enhanced consumer engagement.

The approach paper also provides stakeholders with visibility over the broader work program that is being undertaken by the AEMC in relation to network-related issues arising from the transformation of the electricity sector.

Submissions to the approach paper close on 2 July 2020. The final report is due for publication on 1 October 2020.

 

Media: Kellie Bisset, Media & Content Manager, 0438 490 041 or (02) 8296 7813

Consumer protections for off-grid customers: final report

31 October 2019

Consumers who choose to go off-grid will find it easier, safer and more reliable under reforms proposed today in a final report by the Australian Energy Market Commission (AEMC).

The AEMC has set out a new framework that will require community groups, local councils, developers and other third party providers of stand-alone power systems to comply with jurisdictional regulations on reliability, safety and consumer protections, based on nationally agreed principles.

Microgrids and other types of off-grid power systems are becoming more viable options for some customers as the cost of technologies like rooftop solar and batteries continue to decline. While consumers can currently choose to go off-grid, in most cases they have very limited consumer protections.

The changes would enable those living in remote locations without easy access to the grid, or who wish to disconnect from the grid, to choose an off-grid solution while still having consumer protections in place for things like billing arrangements, reliability and safety standards.

The AEMC has recommended a tiered framework that provides appropriate consumer protections while avoiding unnecessary costs, rather than a one-size-fits-all approach.

The framework includes two main categories of systems:

  • larger microgrids supplying anything from more than a few customers to many hundreds of customers, for example a microgrid supplying a small regional town, or a microgrid supplying a small isolated community
  • smaller microgrids supplying a few customers, or supplying only large commercial and industrial customers, or an individual power system where there is a sale of energy. For example, a microgrid connecting two farms, or an individual power system where a retailer provides the system to a customer in return for an ongoing charge.

For larger microgrids, jurisdictions would develop comprehensive regulations covering registration and licensing, obligations to supply and connect, pricing, consumer protections including for vulnerable customers, and reliability and safety standards. These bespoke regulations would fit the local circumstances but be based on national principles to minimise compliance costs for parties with operations in more than one state.

For smaller microgrids, lighter-touch regulation would apply with jurisdictions setting some minimum consumer protections, such as billing requirements, as well as basic requirements for safety, metering and technical standards.

The AEMC has also considered a situation where a microgrid is large enough to support effective competition in generation and retail. Although no such systems exist currently or appear likely to in the foreseeable future, we have recommended any very large microgrids be subject to a coverage test and, if warranted, regulated by the Australian Energy Regulator in the same way as distribution network businesses.

The AEMC has set out an implementation plan for the new framework, including the key changes that jurisdictional governments and regulators will need to make.

The final report, including recommendations and implementation plan, is now with the COAG Energy Council for consideration.

Today’s report is part two in a complete re-design of regulations for stand-alone power systems.

Part one was published on 30 May 2019 and sets out a pathway to enable network businesses to transition remote customers to stand-alone power systems where it is cheaper than maintaining a connection to the grid, while providing customers with the same protections, reliability standards and their choice of retailer. This can reduce costs for all energy consumers by avoiding expensive investment in poles and wires where customer numbers are limited.

The COAG Energy Council's Senior Committee of Officials has established a working group to progress recommendations from part one of the review. In addition, we have started developing advice for governments on the required rule changes.

This work is part of our broader consumer action plan.

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

BACKGROUND

What is a stand-alone power system?

A stand-alone power system is an electricity supply arrangement that is not physically connected to the national grid. The term encompasses both microgrids and individual power systems:

  • Microgrids: any system supplying multiple customers not physically connected to the grid. Includes anything from a large town to two farms connected to each other. Generation sources typically include solar PV, wind turbines and small scale gas generators and diesel engines.
  • Individual power systems: a system supplying an individual customer not connected to the national grid or a microgrid. Typically includes a combination of solar PV, batteries and a back up generator.

Why has the AEMC done this review?

Stand-alone power systems are generally not captured under the national electricity frameworks. Regulated distribution network service providers are currently prohibited from offering them to customers in most states and territories. If customers obtain their own supply using a stand-alone power system, those systems are subject to jurisdictional legislative frameworks that vary in their comprehensiveness. 

Under the terms of reference for the review provided by the COAG Energy Council, the Commission has considered two priority areas:

  • Part 1 focussed on the development of a national framework for customers that move from grid-connected supply to stand alone power systems provided by existing distribution network service providers. A final report was published on 30 May 2019 that set out a pathway to enable network businesses to transition remote customers to stand-alone power systems where it is cheaper than maintaining a connection to the grid, while providing customers with the same protections, reliability standards and their choice of retailer.
  • Part 2 (this report) considered regulatory frameworks for the provision of stand-alone power systems by parties other than distribution network service providers.

Who are the market bodies?

AEMC - Australian Energy Market Commission is the rule maker, market developer and expert adviser to governments. It protects consumers and achieves the right trade-off between cost, reliability and security.

AEMO - Australian Energy Market Operator is the electricity and gas systems and market operator. It works with industry to keep the lights on.

AER - Australian Energy Regulator is the economic regulator in charge of rules compliance. It policies the system and monitors the market.

Related Articles

Consumer action plan

Consumer protections for off-grid customers: draft report

27 June 2019

Consumers who choose to go off-grid will find it easier, safer and more reliable under reforms proposed today by the Australian Energy Market Commission (AEMC).

The Commission has published a draft framework that would require community groups, local councils, developers and other third party providers of stand-alone power systems to comply with jurisdictional regulations on reliability, safety and consumer protections, based on nationally agreed principles.

Microgrids and other types of off-grid power systems are becoming more viable options for some customers as the cost of technologies like rooftop solar and batteries continue to decline. While consumers can currently choose to go off-grid, in most cases they have very limited consumer protections. 

The changes would enable those living in remote locations without easy access to the grid, or who wish to disconnect from the grid, to choose an off-grid solution while still having consumer protections in place for things like billing arrangements, reliability and safety standards. 

The AEMC is recommending a tiered framework that provides appropriate consumer protections while avoiding unnecessary costs, rather than a one-size-fits-all approach.

The framework includes two main categories of systems:

  • larger microgrids supplying anything from more than a few customers to many hundreds of customers, for example a microgrid supplying a small regional town, or a microgrid supplying a small isolated community
  • smaller microgrids supplying a few customers, or supplying only large commercial and industrial customers, or an individual power system where there is a sale of energy. For example, a microgrid connecting two farms, or an individual power system where a retailer provides an ongoing energy supply to a customer for an ongoing charge.

For larger microgrids, jurisdictions would develop comprehensive regulations covering registration and licensing, obligations to supply and connect, pricing, consumer protections including for vulnerable customers, and reliability and safety standards. These bespoke regulations would fit the local circumstances but be based on national principles to minimise compliance costs for parties with operations in more than one state.

For smaller microgrids, lighter-touch regulation would apply with jurisdictions setting some minimum consumer protections, such as billing requirements, as well as basic requirements for safety, metering and technical standards.

Stakeholder feedback on the draft report is due by 8 August 2019.

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

BACKGROUND

What is a stand-alone power system?

A stand-alone power system is an electricity supply arrangement that is not physically connected to the national grid. The term encompasses both microgrids and individual power systems:

  • Microgrids: any system supplying multiple customers not physically connected to the grid. Includes anything from a large town to two farms connected to each other. Generation sources typically include solar PV, wind turbines and small scale gas generators and diesel engines. 
  • Individual power systems: a system supplying an individual customer not connected to the national grid or a microgrid. Typically includes a combination of solar PV, batteries and a back up generator.

Why is the AEMC doing this review?

Stand-alone power systems are generally not captured under the national electricity frameworks. Regulated distribution network service providers are currently prohibited from offering them to customers in most states and territories. If customers obtain their own supply using a stand-alone power system, those systems are subject to jurisdictional legislative frameworks that vary in their comprehensiveness.  

Under the terms of reference for the review provided by the COAG Energy Council, the Commission is considering two priority areas:

  • Priority 1 has focussed on the development of a national framework for customers that move from grid-connected supply to stand alone power systems provided by existing distribution network service providers. A final report was published on 30 May 2019 that set out a pathway to enable network businesses to transition remote customers to stand-alone power systems where it is cheaper than maintaining a connection to the grid, while providing customers with the same protections, reliability standards and their choice of retailer.
  • Priority 2 (this report) is considering regulatory frameworks for the provision of stand-alone power systems by parties other than distribution network service providers. A final report for priority 2 is due by 31 October 2019.

Who are the market bodies?

AEMC - Australian Energy Market Commission is the rule maker, market developer and expert adviser to governments. It protects consumers and achieves the right trade-off between cost, reliability and security.

AEMO - Australian Energy Market Operator is the electricity and gas systems and market operator. It works with industry to keep the lights on.

AER - Australian Energy Regulator is the economic regulator in charge of rules compliance. It policies the system and monitors the market.

Protecting customers in private power networks

20 June 2019

Hundreds of thousands of people living and working in embedded electricity networks like apartment buildings, shopping centres and retirement villages will have access to the same rights, protections and prices as everyone else, under final reforms proposed today by the Australian Energy Market Commission (AEMC).

The Commission has published a final blueprint to give the fast-rising number of people in these private networks the same protections as customers who are directly connected to the grid. 

AEMC Chief Executive Anne Pearson said many of these customers are locked into uncompetitive arrangements and find it hard to change retailers because they don’t have a market-compliant meter.

“Customers should be able to shop around for the best deal. We’re stepping in with new laws and regulations so all customers can have choice,” said Mrs Pearson.

“The changes would strengthen regulation so people in embedded networks can’t be treated as second class customers.”

“Everyone should have equal access to consumer protections on billing information, payment options, hardship support and notification of planned outages, no matter who they buy their electricity from.” 

After setting out a draft reform package for embedded networks in January 2019, the AEMC has now finalised its recommendations following extensive consultation with consumers, embedded network operators, retailers, developers, ombudsmen, state governments and renewable energy advocates.

The changes would give embedded network customers:

  • improved consumer protections in areas including disconnections, billing information, payment options and notification of planned outages
  • new protections for the first time including access to customer hardship programs and continuity of supply in the event of retailer failure
  • stronger regulation which enhances the ability of the Australian Energy Regulator to enforce compliance with obligations to provide protections
  • access to competitively priced market offers by making it possible for customers to choose the retailer and requiring better industry financial and data transfer processes to help more retailers compete in embedded networks 
  • market-compliant meters that are registered with AEMO  so it’s easier for customers to switch retailer and get better information about their usage and bills
  • the same rights as grid-connected customers when upgrading their connections eg when installing electric vehicle charging stations within apartment blocks
  • improved access to state government services such as concession schemes and emergency financial assistance, provide access to independent dispute resolution, and introduce reliability protections (these changes are recommended to state and territory governments).

Mrs Pearson said that embedded networks can offer important benefits to consumers, provided they are appropriately regulated and customers are fully informed when they sign up to these deals which can last for many years. 

“Embedded networks can include innovative products and services to help manage energy costs such as on-site solar generation and battery storage and demand management services.

“That’s why our recommendations aim to strike a balance by providing important consumer protections without placing undue costs on owners and operators of embedded networks.” 

Putting reforms into action will require a collaborative effort across governments and market bodies. 

“The COAG Energy Council, Australian Energy Regulator and Australian Energy Market Operator, as well as state governments, regulators and ombudsmen, all have a role to play in delivering these important reforms,” said Mrs Pearson.

This includes a staged plan to transition existing embedded networks to the new arrangements, although some very small embedded networks like caravan parks will continue to be exempt.

This review is part of the AEMC’s consumer action plan.

Media: Prudence Anderson, Communication Director, 0404 821 935 or DL (02) 8296 7817.

BACKGROUND

What embedded networks are affected by these recommendations?

Embedded networks are private electricity networks which serve multiple customers from a connection point which is managed by an exempt network service provider. 

Generally, these exempt network service providers on-sell electricity to their customers in these off-market networks like shopping centres, retirement villages, apartment blocks and caravan parks. In recent years, installing and operating embedded networks has evolved into a new business model for parties whose core activity is supplying and selling energy, especially in high density apartment buildings, commercial districts and residential villages. 

This has placed the arrangements for embedded networks, which were originally designed for small networks such as caravan parks where the supply of energy was incidental to the main business activity, under stress. In late 2017, the AEMC found that these arrangements were no longer fit for purpose in our Review of regulatory arrangements for embedded networks). Today’s reform package delivers on the AEMC’s recommendations in that review.

Who are the market bodies?

AEMC - Australian Energy Market Commission is the rule maker, market developer and expert adviser to governments. It protects consumers and achieves the right trade-off between cost, reliability and security.

AEMO - Australian Energy Market Operator is the electricity and gas systems and market operator. It works with industry to keep the lights on.

AER - Australian Energy Regulator is the economic regulator in charge of rules compliance. It policies the system and monitors the market.

Related Articles

Consumer action plan

Protecting consumers in private power networks

Consultation starts on regulatory arrangements for stand-alone power systems provided by local councils, community groups and other third parties

01 March 2019

As part of our broader review of the regulatory frameworks for stand-alone power systems, the AEMC today published a consultation paper on developing a national framework for regulating stand-alone power systems provided by local councils, community groups, developers or other third parties.

A stand-alone power system is an electricity supply arrangement that is not physically connected to the national grid. The term encompasses both microgrids, which supply electricity to multiple customers, and individual power systems, which relate only to single customers. Changes in technology mean that stand-alone systems are becoming an increasingly viable option for electricity consumers, particularly where the costs of providing of a grid-connected service might be high.

In general, stand-alone power systems are currently not captured under the national electricity frameworks. They are instead subject to jurisdictional legislative frameworks that vary in their comprehensiveness. The consultation paper considers the extent to which stand-alone power systems should be regulated, and how any regulation should be applied, including:

  • whether national or jurisdictional arrangements would be more appropriate
  • whether microgrid operators should be obliged to offer to supply or connect customers, and give access to anyone else wanting to use their grid, for example generators and retailers
  • registration and licensing arrangements for stand-alone power system providers
  • economic regulation, including pricing
  • consumer protections, including for vulnerable customers
  • reliability standards 
  • technical and safety standards 
  • whether regulations should apply to both individual power systems and microgrids, and whether there should be any differences between microgrids of different sizes.

Submissions on the consultation paper are due by 29 March 2019.

Media: Prudence Anderson, Communication Director, (02) 8296 7817; 0404 821 935

Background

Under the terms of reference provided by the COAG Energy Council, the Commission is considering reforms to the regulatory framework for stand-alone power systems. We are focussing on two priority areas:

  • Priority 1 is currently considering how to enable distribution network businesses to provide stand-alone power systems to their existing customers where it is economically efficient, for example in remote locations, while maintaining appropriate consumer protections and service standards.
  • Priority 2 is considering a national framework for regulating standalone power systems provided by parties other than local distribution network businesses.

The AEMC published a draft report and recommendations for priority 1 in December 2018. A final report for priority 1 is due by 31 May 2019.

We are due to publish a draft report for priority 2 by 31 June 2019, and a final report for priority 2 by 31 October 2019.

We are concurrently working on updates to the regulatory framework for embedded networks, and the two workstreams will consider a number of related issues, particularly with regards to consumer protections.
 

Related Articles

Consumer action plan

Annual review of electricity network economic regulatory framework to start

06 February 2018

The AEMC has started its annual review of the state of economic regulation for electricity networks in the face of energy market transformation.

The review considers how the economic regulatory framework can best support the continual evolution of electricity networks to facilitate consumer choices and the uptake of distributed energy resources like solar PV, battery storage, electric vehicles and ‘smart’ household appliances that respond to changes in electricity prices.

This year’s review will focus on networks’ incentives to deliver services at the lowest possible cost. As recommended by the Finkel review, this includes testing whether network businesses have a bias towards traditional network solutions over demand-side measures. If a bias is found, the review will consider alternative models for network incentives and revenue-setting, including a total expenditure approach.

To help facilitate consultation on network incentives, we have published a report investigating relevant regulatory frameworks in other countries.

The review will also build on the AEMC's Distribution Market Model project which looked at access and connection arrangements for distributed energy resources. The review will consider the technical implications of more consumers installing distributed energy resources and how access and connection arrangements may need to evolve in the future.

The Commission will be seeking stakeholders’ views through workshops in March and April 2018. Details on the workshops will be made available on our website and through our e-newsletter.

A final report setting out issues and options is due in July 2018. 

Final report on review of regulatory arrangements for embedded networks

28 November 2017

Technology is driving fast-moving change in the energy retail sector. The spread of locally produced renewable power is expanding the number of electricity customers living and working in embedded networks like green commercial precincts and apartment blocks, shopping centres, and caravan parks.

The AEMC has reviewed protections for this expanding group of customers who purchase power from their embedded network providers instead of buying direct from electricity retailers.

Our review of regulatory arrangements for embedded networks released a final report today recommending new rules and laws to give these electricity customers more access to retail competition and consumer protections.

The recommendations are part of the AEMC’s market-wide energy reform program called Power of choice which is putting new arrangements in place to give people more choices in how they use electricity and manage their bills. It follows the introduction of new rules made by the Commission so embedded network customers can choose their own electricity retailer if they want to.

Embedded networks are private electricity networks serving multiple premises. There are now over 200,000 embedded network customers, and rising.

Embedded networks can provide benefits to consumers, provided they are appropriately regulated and customers are fully informed when they sign up to these deals which can last for many years. These benefits can include innovative products and services to help manage energy costs such as on-site solar generation and demand management services.

Our review found many embedded network customers are not receiving better prices and are less able to change supplier if they are unhappy. In practice, embedded network customers receive fewer consumer protections than customers with standard supply arrangements.

Also, the Australian Energy Regulator does not have appropriate powers to monitor and enforce consumer protections for embedded network customers.

In 2018 we will start work on detailed advice on implementing the framework which has been set out in the review’s final report.

This work will include stakeholder consultation on the necessary law changes and change requests for new rules.

We have also made a number of recommendations that should be progressed by the COAG Energy Council, state and territory governments and the Australian Energy Regulator as a matter of priority. These include improving monitoring and enforcement, access to ombudsman schemes and information provision.

Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7817

Stakeholder workshop on gas pipeline review

14 November 2017

The AEMC is calling for expressions of interest from stakeholders to participate in an all-day workshop for our review into the effectiveness of gas pipeline regulation. The workshop, which will consider potential recommendations, will be held at the AEMC office in Sydney on 14 December 2017.

Please register here by Friday 24 November 2017. You can contact Sherine Al Shallah by email (sherine.alshallah@aemc.gov.au) or phone (02 8296 7889) for any further queries.

 

Background

This review is looking at Parts 8 to 12 of the National Gas Rules (NGR) to address concerns that consumers may be paying more than necessary for gas pipeline services.

The review is considering whether rules need to be changed so that pipeline services are subject to appropriate regulation, including price regulation. It is also considering strengthening rules relating to access negotiation and dispute resolution between pipeline service providers and their customers.

Our analysis will be informed by the experiences of gas consumers, industry participants, regulators and governments.

We are working closely with the Gas Market Reform Group, established by the COAG Energy Council, which is implementing recommendations from the AEMC’s east coast gas review to make it easier to buy and sell gas. We are also consulting the Australian Competition & Consumer Commission, Australian Energy Regulator and the Economic Regulation Authority of Western Australia. 

The AEMC will publish a draft report with recommended actions in February 2018 and provide a final report to the COAG Energy Council in June 2018.

Media: Prudence Anderson 0404 821 935 or (02) 8296 7817.

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