Rule Change: Open

Overview

The Commission has initiated a rule change request about creating a framework for setting technical standards for distributed energy resources (DER).
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The Commission has initiated a rule change request about creating a framework for setting technical standards for distributed energy resources (DER).

On 5 May 2020, the Australian Energy Market Operator (AEMO) submitted a rule change request seeking to establish a framework to enable it to set initial minimum technical standard for DER.

If made, this rule change will oblige AEMO to create a subordinate instrument under the National Electricity Rules that sets minimum technical standards for DER.

The Commission published a consultation paper on 25 June 2020 to seek stakeholder input on issues relevant to the request.

Background

Consumer-led growth in DER assets in Australia has been substantial. AEMO has argued that, the integration of DER devices into the power system is likely to lead to new system security issues. It also pointed out that there is no uniform minimum technical standard across the national electricity market.

Rather, technical standards for DER assets can vary greatly, both jurisdictionally and between local distribution networks. Due to the growth of DER in the aggregate, AEMO has stated that this can cause challenges for power system balancing, stability, and recovery after major incidents.

AEMO has requested that the AEMC create an obligation on AEMO to develop a subordinate instrument for setting minimum technical standards, combined with a high-level definition of DER. AEMO stated that minimum technical standards are likely to lead to, greater and more efficient integration of DER, while also providing more secure grid and power systems operation.

Context

Assessing this rule change request does not require the AEMC to consider the detailed content of the minimum technical standards.  Instead, the request is concerned with the proposed creation of a subordinate instrument that specifies minimum technical standards (as initially determined by AEMO) and what the standards will apply to.

AEMO is undertaking its own consultation process concurrent with this rule change process in order to have a first set of minimum technical standards completed and ready for implementation by the time this rule change process is finalised.

While the rule change request seeks to address some imminent system security issues caused by DER connections, the ESB has been tasked by the COAG Energy Council to develop an on-going governance framework for DER technical standards. Implementation of the ESB’s governance framework may require amendments to the National Electricity Rules in the future.

The consultation process

Submissions on the consultation paper were due on 23 July 2020. The AEMC received 27 submissions. These are published on this project page.

Extension of time

On 2 September 2020 the Commission extended the period of time to make a draft rule determination until 3 December 2020. It considered that this extension was necessary due to the complexity of issues arising from stakeholder submissions which require further analysis.

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