The Australian Energy Regulator (AER) has today released its assessment of the annual expenditure claims for the Demand Management Innovation Allowance Mechanism (DMIAM) for distribution network services providers (DNSPs).
This assessment relates to the 2019–20, 2020–21 and 2021–22 reporting years.
As part of distribution businesses 5-yearly reset determinations, the AER approved a total of $11.5 million in project expenditures over the last 3 years for researching, developing, or implementing demand management capability or capacity projects. A key consideration for approving these projects was that they must be innovative and have the potential to reduce long term network costs.
The AER’s assessment provides insights into the total value of expenditure approved and the type of projects the scheme has delivered over the last 3 years. This includes:
- 33% related to identifying how to best manage the grid assets to increase Customer Energy Resources integration capacity
- 21% related to identifying effective ways to make best use of behind the meter battery systems
- 14% related to identifying how to apply electric vehicles integration vehicles to grid (V2G).
Where projects are successful, they may be incorporated into business-as-usual management practices. This reduces the reliance on more costly infrastructure and thereby reduces network charges.
For more detailed information about the projects, please refer to each distributor's DMIAM report.
Background
The Demand Management Innovation Allowance Mechanism funds research and development projects undertaken by distribution network service providers to reduce or shift customer demand to avoid or defer network augmentation. The projects may target a reduction in peak demand or broad-based demand.
The demand management innovation allowance is provided to each distributor in the form of a fixed allowance for each regulatory period. If distributors do not spend their allowance in full, the underspend is deducted from the expenditure allowance for the next regulatory period. If the allowance is overspent, the distributor must meet the higher expenditure itself and cannot recover this from its customers.