On 12 August 2021 the Australian Energy Market Commission (AEMC) published its Access, pricing and incentive arrangements for distributed energy resources (DER) final determination. The determination changes the energy rules with the aim of better managing the rapid growth of small-scale solar into the grid, while supporting growth of batteries and electric vehicles.
Guideline development and review
As a result of this change, the AER is required to consult on and develop export tariff guidelines and customer export curtailment values by 1 July 2022. On 19 May 2022 we published final Export Tariff Guidelines which provide information and guidance to distributors and other stakeholders about how networks will be required to justify any future proposals for two-way pricing. On 30 June 2022 we published the final CECV methodology and associated values. These Customer export curtailment values (CECV) will capture the detriment to customers and the market when DER exports are curtailed and help guide efficient levels of investment for export services. DNSPs will use these values to justify future investment to support growing levels of export on their networks.
By 1 July 2022, the AER is also required to review and, if necessary, amend the:
- Distribution Service Classification Guidelines
- Cost Allocation Guidelines
- Expenditure Forecast Assessment Guidelines
- Connection Charge Guidelines
The AER has reviewed the Cost allocation Guideline, Distribution Service Classification Guideline and Expenditure Forecast Assessment Guideline and found at this time that no amendments are necessary or desirable for the purpose of giving effect to the rule change.
In respect of the connection charge guidelines, an important outcome of the rule change is that a DNSP will not be able to offer a static zero export limit to a small customer who is seeking to connect DER to the network, unless it is requested by the customer, or it satisfies an exception listed in the AER’s connection charge guidelines. The AER has commenced consultation on its review of the Connection Charge Guideline. Given the complexity and importance of the issues involved, we consider it important to give full and careful consideration to the issues, and have therefore decided to finalise our decision on this matter in November after an extensive consultation process, including a stakeholder workshop. Prior to this, we will advise stakeholders when we publish our draft decision for consultation, inviting submissions.
It is also important to note that the AER has been consulting separately on (more minor) changes to the Connection Charge Guideline as part of the recent Stand Alone Power System (SAPS) rule changes.
The rule change also requires the AER to consult and report on how to take into account export services in the Annual Benchmarking Reports for distribution by 1 July 2022. The AER considers there are significant synergies with the AER’s upcoming review of incentive arrangements for export services such that it is appropriate to examine possible refinements to distribution benchmarking concurrently with that incentive review. This review of incentive arrangements and changes to the Annual Benchmarking Report for distribution will be occurring over the second half of 2022, starting with a consultation paper in August.