The Australian Energy Regulator (AER) has released its DER Integration Expenditure guidance note (the guidance note) that outlines the AER’s expectations of what evidence should be included in distribution network proposals for integrating higher levels of customer DER. The AER has also released Customer Export Curtailment Value (CECV) Methodology and accompanying explanatory statement that determines the value of reduction in export curtailment to all customers. CECV will help guide the efficient levels of network expenditure for the provision of export services and serve as an input into network planning.
The AER is required to make CECV Methodology under the Australian Energy Market Commission’s recent Access, pricing and incentive arrangements for distributed energy resources rule change. The rule change aims to facilitate the integration of distributed energy resources more efficiently into the electricity grid. It clarifies that export services are part of the core services provided by distribution networks. The final rule change determination also required the AER to publish the CECV methodology and values by 30 June 2022.
The guidance note was developed as a result of the Value of DER (VaDER) methodology study that identified DER value streams, the types of costs and benefits that may arise because of a network investment to increase DER hosting capacity. The publishing of this guidance note concludes the work that the AER started on in 2019 with the release of its consultation paper – Assessing Distributed Energy Resources (DER) Integration Expenditure.
The guidance note includes direction on how distribution networks should:
- develop business cases for network investment integrating higher levels of DER and quantify DER values,
- develop DER integration plans and investment proposals, and
- quantify DER benefits in a cost-benefit analysis.
The CECV methodology includes guidance on how the:
- CECV methodology relates to DER integration,
- AER estimates CECVs and what the process is for updating CECVs, and
- distribution network practically applies CECVs in developing investment proposals.