In April 2006, the AER received an application from GridX Power Pty Ltd (GridX) seeking a general exemption from the requirement to register as a network service provider (NSP) and comply with relevant provisions of the National Electricity Law (NEL) and National Electricity Rules (NER). The exemption was in respect of its proposed operation of a special type of electricity distribution network – the GridX model network.
Network service provider exemptions are assessed in accordance with guidelines issued by the AER under clause 2.5.1 of the National Electricity Rules.
The GridX model network is innovative. The network would deliver electricity via gas-fired micro-generators buried within housing estates. Excess energy generated within each embedded network would be exported to the National Electricity Market (NEM), but as the GridX model network would be self-contained, the network would be configured so that the import of electricity from the NEM would not be possible.
The AER has concluded that it is not appropriate to grant a general (or class) exemption for the GridX model. Full reasons for its decision are in its GridX report, available from the AER's website.
The AER is, however, keen to foster innovation in network design and energy services delivery. Accordingly, and for the reasons set out in the decision document, the AER considers that it is more appropriate to treat future applications from GridX under the specific exemption provisions of the guideline. Under this approach, GridX would be granted specific exemptions from the NEL and the NER, subject to meeting certain conditions, including conditions associated with complying with particular retail pricing and service obligations.
This would mean that while GridX would be exempt from most network service provider obligations, it would still be required to comply with important technical and safety requirements and enter into appropriate arrangements which safeguard the interests of retail customers who connect into GridX’s model network.