News Topic ID

Unlocking the Full Potential of Consumer Energy Resources

03 August 2023

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, media@aemc.gov.au. 

Integrating Price-Responsive Resources

03 August 2023

The Australian Energy Market Commission (AEMC) is consulting on ways to better integrate unscheduled price-responsive resources into the national electricity market (NEM).

As more households and businesses invest in newer technologies such as batteries, rooftop solar, electric vehicles and home energy management systems, these consumer energy resources (CER) will play a vital role in the shift to a net zero energy system.

Similarly, traditional assets such as hot water heaters and pool pumps will continue to play their part in how the energy system performs and transforms.

As a result of the rapid uptake of CER, energy companies are increasingly combining these resources to form Virtual Power Plants (VPPs), which are actively responding to price signals in the national electricity market (NEM).

Additionally, there are commercial and industrial resources such as chillers and hydrogen electrolysers, which could be price-responsive and significantly impact the energy market in the future.

Currently, these resources are not fully integrated into the NEM’s planning and operation functions. By integrating them more effectively, AEMO could accurately determine how much energy demand needs to be met, how to meet this demand and the price at which electricity is purchased.

Better integration of these resources could lead to more efficient network and wholesale market services, reducing the overall cost of providing reliable electricity to consumers, ultimately leading to lower prices.

The Australian Energy Market Operator (AEMO) states that without efficient integration of price-responsive resources, additional costly large-scale generation, storage, and network infrastructure may be required to maintain a secure and reliable electricity supply.

Our consultation paper, published today, explores a proposal from AEMO for a voluntary mechanism to allow these resources to participate in the wholesale electricity market.

Through this, energy companies using the mechanism would improve the demand forecasts which underpin the efficient operation of the NEM. This would result in lower electricity spot prices, reduced generation costs, and decreased network expenses.

AEMO’s rule change 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 directions paper we published today proposes reforms for measuring and managing CER separately. This reform aims to benefit not only the customers investing in those assets but all customers, through improvements in the operation of the power system.

Submissions in response to the consultation paper are being accepted until 14 September 2023.

View the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au.

AEMC begins consultation to change AER obligations

22 June 2023

The Australian Energy Market Commission (AEMC) is consulting on a rule change request from the Australian Energy Regulator (AER) to remove the requirement that they develop electricity consumption benchmarks that are no longer required on bills.

The AER is currently required to publish information about average electricity consumption for various household sizes every three years, to make it easier for retailers to provide benchmarks on energy bills to their energy customers.

As at 30 September 2023, retailers will no longer be required to include benchmarks on energy bills, when the AER’s Better Bills Guideline is implemented.

While benchmarks were initially introduced to support consumers to make energy efficient decisions, the AER decided when establishing the Better Bills Guideline that requiring retailers to include benchmarks on bills no longer brought value to customers in the evolving energy market.

The AER is proposing that they not be required to develop benchmarks from late 2023 onward, on the basis that the benchmarks are no longer used.

The AEMC has published a consultation paper and is seeking feedback on whether to remove the obligation on the AER to develop bill benchmarks.

An expedited process is being used for this rule change, which includes one round of consultation.

Stakeholders have until 6 July 2023 to object to the expedited process, and 20 July 2023 to provide their written submissions in response to the consultation paper.

Visit the project page to read more or provide feedback.

Media: Nicole Stokes: 0401 826 522 or media@aemc.gov.au

Preliminary options to improve Retailer of Last Resort scheme

11 May 2023

A number of reform changes are being considered to improve the Retailer of Last Resort scheme put in place to protect customers in the event that an electricity or gas retailer goes out of business.

The Australian Energy Market Commission (AEMC) today released a directions paper and is seeking feedback on a number of potential improvements to the scheme, which was introduced in 2012.

Through the Retailer of Last Resort scheme, if an energy retailer goes out of business or ‘fails’ its customers are transferred to a new energy provider as a ‘Retailer of Last Resort’ to ensure that customers’ energy supply is maintained.

In 2022, geopolitical circumstances and record wholesale prices placed additional pressures on retailers operating in the energy market, resulting in the collapse of seven authorised retailers and triggering Retailer of Last Resort events.

With insights gained during the past year and stakeholder feedback having also been taken into consideration, the AEMC has prepared separate recommendations for electricity and gas events.

For electricity retailer failures, the AEMC is considering options to reduce costs for customers and remaining retailers, such as:

lowering the costs for the designated Retailer of Last Resort by clarifying the market costs it can claim
lowering costs for customers by introducing a mechanism to issue the failed retailer a bill for the costs the designated Retailer of Last Resort experienced from the failure
providing the Australian Energy Regulator (AER) and designated Retailer of Last Resort with better information about its new customers.

For gas retailer failures, the AEMC considering recommendations which:

improve the Retailer of Last Resort gas directions framework to clarify the current arrangements and better support the designated Retailer of Last Resort to manage new customers
provide the AER and designated Retailer of Last Resort with better information about its new customers
clarify how the benefits and costs of a Retailer of Last Resort are shared with customers.

Submissions in response to directions paper close at 5.00pm AEST 22 June 2023.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

Extension on consumer energy resources benefits rule change

27 April 2023

The AEMC will now publish its draft determination for the Unlocking CER benefits through flexible trading rule change by October 2023.

The project is examining ways to unlock benefits for customers with consumer energy resources (CER) such as solar panels, batteries and electric vehicles.

The consultation paper for this rule change was released for comment in December 2022.

This extension of time will allow the Commission further opportunity to consider the matters raised in response to the consultation paper.

A directions paper is also expected to be published mid-year.

This project remains an important priority for energy market bodies and complements other reforms underway to effectively integrate CER into the National Electricity Market.

Visit the project page for further information and contact details.

Media enquiries: Jessica Rich | 0459 918 964 | media@aemc.gov.au

Consultation underway to unlock CER benefits

08 December 2022

The Australian Energy Market Commission (AEMC) is investigating ways to unlock benefits for customers with consumer energy resources (CER) such as solar panels, batteries and electric vehicles.

This could include savings on energy bills and access to new products and services, as well as improvements to system efficiency, reliability and security that help to drive down energy costs for all Australians.

In a consultation paper published today, the AEMC is seeking feedback on the opportunities presented by CER, as well as the barriers and solutions for optimising the value of CER to consumers and the market.

Energy customers are increasingly taking up CER in their homes and businesses, and the resources are expected to play a significant role in the shift to a net-zero energy system.

A high proportion of Australian residences already have solar PV, with around 3.19 million total solar rooftop PV systems installed for residential and small business customers in Australia, while more than 50,000 total registered small-scale battery systems have been installed in Australia in the past seven years.

There will also be a surge in electric vehicles in Australia, with 92 to 99 per cent of all vehicles expected to be electric by 2050.

The work complements a suite of reforms from the AEMC, including a review of CER technical standards and a draft report to increase the uptake of smart meters.

The consultation paper explores a proposal from the Australian Energy Market Operator (AEMO) that would see secondary, “behind the meter” measurement points introduced to support ‘flexible trading’ for residential and business energy users.

Under the AEMO proposal, energy customers could choose to have their CER separately metered, which could allow consumers to take up offers from multiple service providers or retailers, or access different price offerings for different resources from the same retailer.

The proposal suggests that allowing more flexibility in how CER is traded in energy markets could unlock a host of benefits such as lower costs and enhanced system reliability for all consumers in the longer-term, including consumers without CER.

Other benefits include better value for customers with CER, who could reduce their overall energy bills by taking advantage of off-peak pricing or be paid to contribute to network reliability.

Effectively integrating CER into the energy system and unlocking benefits for consumers are priorities recognised in the Energy Security Board’s (ESB) post-2025 market design and advice.

Submissions in response to the consultation paper are being accepted until 16 February 2023.

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC recommends rules for hydrogen and renewable gases

24 November 2022

Recommended rules that will help pave the way for Australia’s hydrogen and renewable gas industry and support our emissions reduction plans have been sent to Energy Ministers for approval.

The Australian Energy Market Commission’s (AEMC) recommended rules enable Energy Ministers to change the national gas and retail regulatory frameworks so that low-level hydrogen gas blends and renewable gases can be safely supplied through existing distribution pipelines to appliances in homes and businesses.

Under the Review’s terms of reference, the AEMC was required to consult upon the proposed rules contained in the final report. Having done this, we are now publishing the recommended rules.

AEMC Chair Anna Collyer says these rules represent critical steps towards the development of a national hydrogen and renewable gas industry.

“The changes we are recommending be made to the framework aim to provide clear ‘rules to the game’ for future potential investors, and pilot projects that are taking those key steps today," Ms Collyer said.

"We want to ensure those investors can confidently make informed decisions that will in turn grow the sector, paving the way for a decarbonised economy.

“We can’t know exactly what shape a net zero power system will take, but we can define the problems we need to solve to get there and create space for innovation to find the solutions.”

In line with the terms of reference, once the AEMC provides Energy Ministers with recommended rules for their approval, the legislation and rules would then be made.

Visit project page for more information and contact details.

Media enquiries: Georgina Kentwell 0411 043 964, media@aemc.gov.au

Review into the arrangements for failed energy retailers' contracts commences

13 October 2022

A review is underway to investigate whether changes should be made to the Retailer of Last Resort scheme to protect customers in the event that a retailer goes out of business.

The Australian Energy Market Commission (AEMC) today released a consultation paper outlining key focus areas for the first stage of the self-initiated review. This includes issues involving the transfer of the failed retailer’s contracts to the retailer of last resort to prevent costs being passed on to customers.

Under the Retailer of Last Resort scheme, if an energy retailer goes out of business or ‘fails’, its customers are automatically transferred to a new energy provider as a ‘Retailer of Last Resort’ to ensure that customers' energy supply is maintained.

In recent months, record wholesale prices have placed additional pressures on retailers operating in the energy market, resulting in the collapse of seven authorised retailers and triggering Retailer of Last Resort events.

While customers are transferred, designated Retailers of Last Resort are currently unable to access the hedging contracts of the failed retailer. These contracts have value and would ordinarily provide insurance against high electricity spot prices or be used to manage supply of gas purchased for customers.

As part of the first stage of the review, the AEMC is seeking stakeholder feedback on whether changes can and should be made to energy laws and rules to minimise the risks Retailers of Last Resort face and the costs customers incur in the event of retailer failures.

The AEMC is specifically gathering information about the benefits, risks and practicality of solutions to enable electricity and gas retailers to access the contracts they need, including any legal barriers to solutions proposed. The Commission is also looking into retailer behaviour during volatile market conditions.

Submissions to this consultation paper are due on 10 November 2022, with a stage one final report expected in February 2023.

Media contact here: Jessica Rich, 0459 918 964 or email us.

Visit project page for more information and contact details.

New rules aim to protect customers experiencing family violence

15 September 2022

Energy customers affected by family violence will soon be better protected under new rules set out in a final determination published by the Australian Energy Market Commission today.

The Chair of the AEMC, Anna Collyer, said family violence perpetrators can exploit energy services to control survivors, undermine financial security, and inflict psychological and physical harm.

‘Intimate partner violence contributes to more death, disability, homelessness and illness in adult women than any other preventable risk factor,’ she said.

‘Perpetrators can use the need for utilities like gas and electricity in many ways to control and harm people – including finding them in new locations.

‘This work is occurring under the National Energy Retail Rules because energy retailers can play a significant role in helping protect the survivors among their customers.

‘The final rule includes measures that protect customers’ physical safety by safeguarding their identities and locations, as well as helping with the financial challenges that frequently arise after leaving a violent household.

‘It requires actions for retailers that will drive changes to their culture, like building their staff’s skills and making the safety of an affected customer paramount in their dealings.'

‘Practical changes for retailers include developing processes that reduce a customer’s need to re-live their trauma by having to repeatedly describe their circumstances.’

In undertaking this work, the AEMC consulted extensively with the energy sector, family violence organisations, and other sectors that had instituted similar protective policies, such as telecommunications and banking.

National coordinator of the Economic Abuse Reference Group, Carolyn Bond, said new measures that prevent a retailer from asking an affected customer to provide evidence of domestic abuse will go a long way.

“It is so important to see in this rule change that victim-survivors of abuse no longer have to provide evidence before they receive assistance. Many people choose not to go to court or report their abuse to the police in order to obtain documentary evidence. On the other hand, in situations where that evidence is available, it can contain personal details that can re-trigger trauma for the customer and be confronting for staff,” Ms Bond said.

Chief Executive Officer of Thriving Communities Partnership, Ciara Sterling, also welcomed the ‘no documentation’ measure and hopes it’s adopted by other regulators moving forward.

“When retailers believe customers and the stories they share, they build greater trust with the people they are assisting and as a consequence reduce barriers to people seeking support,” Ms Sterling said.

Anna Collyer said the AEMC worked hard to cover the most significant number of customers with this rule by adopting a broad definition of family relationships to identify family violence and including small business and residential customers.

‘Similarly, we also recommend the rule’s protections should apply to ‘embedded networks’ such as caravan parks, where there might be a single electricity meter with multiple individual users paying a share of the bill,’ Ms Collyer said.

The final rule requires that when dealing with customers affected by family violence, retailers must:

have regard firstly to the safety of an affected customer in any dealing they have with them.
not disclose confidential information about an affected customer to another person (and must require their contractors and agents not to disclose this information) without the customer’s consent.
provide a secure process to identify affected customers and minimise the need for them to repeatedly disclose their experiences.
not require documentary evidence in order to offer protection.
ensure staff can identify, assist, and engage appropriately and effectively with customers affected by family violence.
adopt, publish, and comply with a comprehensive family violence policy.
consider family violence as likely to cause payment difficulties and hardship, meaning affected customers may also qualify for other forms of assistance.

The rule change was requested by Red Energy and Lumo Energy. It follows successful family violence reforms in Victoria, draft reforms in Western Australia, and family violence protections in other essential service sectors, including water, banking and telecommunications.

The rule commences on 1 May 2023.

Visit the project page for more information and contact details.

Media: Jessica Rich 0459 918 964 - media@aemc.gov.au

AEMC publishes final report for hydrogen and renewable gas review

08 September 2022

The Australian Energy Market Commission (AEMC) has recommended to Energy Ministers that changes be made to the national gas and retail regulatory frameworks to enable the natural gas sector to use hydrogen and renewable gas to support Australia’s emissions reduction plans.

The recommendations in the final report and accompanying proposed draft rules published by the AEMC are critical steps toward the development of a national hydrogen and renewable gas industry.

The AEMC’s recommendations pave the way for setting up national regulatory frameworks so that hydrogen blends and renewable gases can be safely supplied through the existing distribution systems to appliances in homes and businesses.

AEMC Chair Anna Collyer said improvements to the regulatory framework will lay the foundations for the development of a decarbonised gas sector and keep Australia firmly at the forefront of reform in the hydrogen industry.

“From our perspective at the AEMC, hydrogen is fascinating because of the way it uniquely intersects with both gas and electricity markets. It’s a future source of renewable fuel, but it’s also set to become the largest industrial customer for electricity in the NEM’s history.

"We can’t know exactly what shape a net zero power system will take, but we can define the problems we need to solve to get there and create space for innovation to find the solutions.

That’s what this work does. Hydrogen has the potential to deliver solutions we need for a net zero future, and by extending the regulatory frameworks, we allow participants to develop their business and facilitate innovation,” Ms Collyer said.

The AEMC’s work not only offers certainty to market participants and investors but provides clarity around access to pipelines, as well as supports well-informed decision-making by market participants and consumers.

The AEMC’s final recommendations also aim to enable the safe supply of low-level blended gases and consumer protections including billing and pricing.

As well as outlining recommendations for an efficient, safe and secure framework, the final report also sets out recommended draft rule changes for the National Gas Rules and National Energy Retail Rules. These accompanying draft rules are intended to operationalise the policy recommendations.

Written submissions on the recommended draft rules are open until Thursday 13 October 2022.

The final initial rules will be provided to Energy Ministers in November 2022.
Visit project page for more information and contact details.

Media: Jessica Rich - 0459 918 964 - media@aemc.gov.au

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