Designing the grid of the future
The electricity system is transforming. More consumers are buying and selling power. The AEMC is redesigning the electricity market to give consumers better control over how their solar panels, batteries, electric vehicles and other distributed energy resources are used. For consumers, this means that if you don’t need all the power from your solar panels or batteries, you can sell it.
Harnessing customer power
Our vision is for a market where consumers buy and sell energy and demand response services in a more dynamic way – in response to prices and their own preferences.
These changes will benefit everyone on the grid - not just those with solar panels or other distributed energy resources. By making the most of what we’ve got, the grid can operate more efficiently, which means lower prices for all consumers.
Customer power can be harnessed to:
Key actions to modernise the grid
The way customers are using the grid is changing. That means we must also change the way we regulate and operate the grid and the way consumers access, pay for and are rewarded for the services they provide to the grid.
If we don’t make changes to the way networks operate, consumers will bear the cost of distributed energy resources being poorly integrated into the system. For example, electric vehicles could add to peak demand instead of smoothing it, and solar generation could be unnecessarily constrained off.
The AEMC’s 2019 Electricity network economic regulatory frameworks review recommends actions that will take us from where we are now, to the grid of the future. Watch a webcast about our final report:
Grid of the future work plan
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Action |
Responsibility and status |
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1. Reform the distribution access and charging framework Reform how customers are charged for using the grid - so they can get the most out of their distributed energy resources while minimising total system costs (to be undertaken as part of ARENA’s Distributed Energy Integration Program) |
Awaiting rule change requests Responsibility: AEMC, DEIP |
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2. Continue implementation of network tariff reform Reform network pricing so customers are rewarded for using energy in a way that helps the grid work more efficiently |
Ongoing progress is being made through annual tariff structure statements Responsibility: AER |
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3. Guide distribution businesses' expenditure to integrate distributed energy resources Develop guidelines for how the AER will consider proposals from distribution businesses to integrate distributed energy resources |
AER published consultation paper on a guide to DER expenditure forecasts in November 2019 Responsibility: AER |
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4. Develop a common methodology to value customer exports Develop a methodology for estimating the ‘value of customer export’ to help distribution businesses weigh up the costs and benefits for all consumers of building more network. |
Progressing through DEIP DER valuation package Responsibility: AER, AEMC, ARENA, consumer groups |
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5. Monitoring smart meter roll out Review the effectiveness of introducing competition in providing smart meters so customers have the tools they need to optimise their distributed energy resources. This will including monitoring the roll out of smart meters, along with assessing the potential benefits of greater data collection |
Monitoring is continuing. Review will commence in December 2020 Responsibility: AEMC |
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6. Understand consumer information needs Improve understanding of the information customers need about their distributed energy resources, and how third party providers can help consumers act on that information |
Not yet commenced Responsibility: AEMC, consumer groups |
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7. Improve visibility in low voltage networks Where it is cost effective, invest in new monitoring and modelling equipment to improve the visibility of loads and voltages on the part of the grid between a customer’s property and the power pole so distribution businesses can better understand current and future network constraints |
Ongoing Responsibility: Distribution businesses |
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8. Understand future data requirements Identify additional meter data that should be collected and made available to support better visibility of network constraints |
Ongoing Responsibility: Distribution businesses, consumer groups |
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9. Develop technical standards New technical standards are needed to support the technical integration of distributed energy resources and improve the grid’s resilience |
Ongoing Responsibility: AEMO, Standards Australia |
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10. Improve technical compliance Consider mechanisms to assess and improve compliance of distributed energy resources with technical standards |
Not yet commenced Responsibility: Jurisdictional governments and safety regulators |
Working together to develop the grid of the future
The efficient integration of distributed energy resources is not a task that can be achieved by one organisation or one part of the industry alone.
All the market bodies – the Energy Security Board, the Australian Energy Regulator, the Australian Energy Market Operator and the AEMC – along with the Australian Renewable Energy Agency, government departments, industry and consumer groups are working together to make it happen.
In particular, ARENA’s Distributed Energy Integration Program (DEIP) is providing a forum for collaboration aimed at maximising the benefits of distributed energy resources for everyone.
Two of the AEMC’s key recommendations – reforms to distribution access and charging arrangements, and development of ‘customer value of export’ methodology – will be progressed through the DEIP program.
The DEIP steering group comprises:
