Priority area: integration of distributed energy resources
Households and businesses are continuing to install small-scale solar and energy storage technologies at an increasing rate and this will continue as batteries and electric cars get cheaper. More than two million customers now have solar panels, with around six solar panels being installed per minute by customers and distributed around the grid. These distributed energy resources have the potential to contribute to the efficient operation of the grid and reduce costs for consumers if we have the right incentives and regulatory arrangements.
Distributed energy resources (DER) have the potential to provide consumers with a range of benefits:
- Consumers who install DER units may be able to reduce the price they pay for electricity or may obtain improved reliability outcomes.
- DER may also help reduce the cost of power system augmentation, helping to reduce the overall cost of supply faced by all consumers, including those without DER.
- DER can contribute to power system security by responding to faults and either dispatching or absorbing energy to keep the technical parameters of the power system, such as voltage and frequency, stable.
- Increased penetration of DER may also help reduce the overall emissions intensity of the NEM, by displacing other more emissions-intensive generation.
While DER provides a range of benefits, it also includes some relatively new and developing technologies. The power systems and participants within it need to adjust to the effects of these new technologies.
The AEMC is prioritising work that will help transform power system into a platform for multiple services reflecting the different ways the grid is likely to be used by different types of customers.
We are mapping out a pathway towards the grid of the future where customers who own DER assets will get the most out of them and all customers will benefit from lower total system costs and reliability and security benefits.
We are working with our stakeholders to take us from where we are today, to where consumers want us to be in the future.
Current AEMC projects to help integrate distributed energy resources
Current AEMC projects which are helping to integrate DER include:
- Electricity networks economic regulation frameworks (ENERF) review: In light of the significant growth in decentralised energy resources, the review recommended a series of actions the AEMC and others need to take to support the efficient operation of the energy market in the long term interest of consumers.
- Regulatory sandboxes: this part of the ENERF review is looking at at the benefits of a regulatory sandbox toolkit to make it easier for businesses to develop and trial innovative energy technologies and business models. A regulatory sandbox is a framework within which participants can trial innovative concepts in the market under relaxed regulatory requirements at a smaller scale, on a time-limited basis and with appropriate safeguards in place.
- Stand-alone power systems: Our stand-alone power systems review has proposed changes to the energy laws and rules to enable distributed energy resources to be used to provide individual power systems or micro-grids where it’s more efficient than a traditional grid connection, eg in remote or high bushfire risk areas.