Rule Change: Open
Overview
The Australian Energy Market Commission (AEMC) has published a Directions Paper that sets out the Commission’s initial views and positions for unlocking CER benefits through flexible trading rule change. This rule change is seeking to improve flexibility and trading of consumers’ energy resources (CER) to unlock value for consumers and to facilitate better integration of flexible CER into the power system to deliver a more reliable and secure energy system that would benefit all consumers.
The Directions Paper builds on and responds to stakeholder input to the consultation paper published in December 2022.
The rule change forms one of the many CER implementation reforms to achieve successful CER integration in the NEM.
The Commission has split the rule change into three core areas:
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Optimising the value of CER flexibility: Opportunities for separately identifying and managing flexible CER.
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Flexible trading of CER with multiple energy service providers at residential and/or commercial premises.
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Opportunities to improve how energy use is measured for street lighting and other street furniture (such as park BBQs).
The first two key areas build on and support the objectives of successfully integrating CER to achieve increased consumer benefits and a more efficient future power system. The third area relates to improving arrangements for managing energy use from street lighting and street furniture given innovation in the measurement capability that is now being built into street lights.
The Commission’s positions for each of these areas are provided in the Directions Paper.
As part of our assessment, the AEMC is considering what consumers need to use their CER as they intended while having the confidence to allow their CER to be used to support system needs. This includes enabling choice, considering appropriate incentives including price outcomes as well as clear information and protections - noting differences within and across consumer segments.
For energy market participants, we are considering the technical and market process changes (including financial arrangements) needed across the supply chain; that is, the changes needed to retail and wholesale markets, networks, and for the market operator to perform its role.
We are undertaking a benefits and costs analysis to inform the rule change. This work that will be undertaken by Energeia will assess the costs and benefits of increased integration of CER flexibility – both to consumers and the system. A copy of their approach and methodology paper is published with the Commissions Directions Paper for stakeholder input.
We welcome stakeholder’s feedback on the Directions paper and Energeia’s approach and methodology paper to inform the next stage of assessment.
AEMO’s rule change request
There is a growing need for effective integration of CER in the National Electricity Market (NEM) as the uptake of CER continues. Better integration of CER can enable the electricity system and markets to operate more efficiently, reliably, and securely in a manner that benefits all consumers while offering new opportunities for owners of CER to get more value from their resources.
AEMO has:
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put forward a rule change request that proposes a specific model (with a high level design) that seeks to enable consumers and the market to separate their flexible CER from their inflexible/passive loads (i.e., lights, fridges) and have them managed and recognised in the wholesale energy market settlements if they choose to.
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proposed the rule change request as it considers the current national electricity rules (NER) and in particular, the metering arrangements, do not support consumers to easily access products and services which maximise the value of their CER uptake.
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highlight that the separate metering of CER - separate from inflexible or passive load (e.g., lights, fridges etc) - is a means to unlock more CER value for consumers and the market.
The proposed rule change request builds on the work and recommendations from the final advice of the Energy Security Board’s (ESB) post-2025 market design.