Market Review: Completed
The review, initiated by the Commission, looked at detailed amendments to the regulatory framework required to implement the recommendations made by the Commission in the final reportReview of regulatory frameworks for stand-alone power systems - priority 1.
In that review, the Commission set out a number of recommendations for changes to national energy laws and rules specifically to facilitate the provision of stand-alone power systems (SAPS) by distribution businesses.
SAPS – usually a combination of solar PV, batteries and a back-up generator – are increasingly allowing electricity services to be delivered through alternatives to grid connection at a lower cost and with improved reliability, which could be particularly beneficial for remote communities. Currently, SAPS are not captured under national regulatory frameworks or are subject to jurisdictional frameworks which vary in their coverage.
Under the terms of reference, this review considered how best to implement the Commission’s proposed regulatory framework. The review developed detailed revisions to the rules required to implement the new regulatory approach for distributor-led SAPS.
Enabling distribution businesses to provide SAPS
On 28 May 2020 the AEMC published a final report that advises on a package of proposed rule changes to enable distribution network businesses to supply their customers using SAPS where it is cheaper than maintaining a connection to the grid.
The reforms will help unlock the benefits of new technologies that are increasingly allowing electricity services to be delivered through alternatives to a traditional grid connection at a lower cost and with improved reliability, and with other benefits such as reduced bushfire risks.
Under the reforms, customers who receive stand-alone systems will retain all of their existing consumer protections, including access to retail competition and existing reliability and safety standards. As such, customers would not be disadvantaged where a distributor determined that it would be more efficient to supply them on a stand-alone basis. Cost savings arising from the use of lower cost stand-alone systems will flow through to all users of the distribution network, through lower network prices.
A draft report for the review was published on 19 December 2019, and the terms of reference was published on 19 September 2019.
The COAG Energy Council, AER, AEMO, state and territory governments and regulators all have a role to play in delivering the recommended changes, which include changes to national energy laws and state-based regulations. The AEMC has provided detailed information on how to make these changes.
The COAG Energy Council's Senior Committee of Officials has established a working group to progress recommendations from the priority 1 review, and also from the AEMC's review to update the regulatory framework for embedded networks which considered a number of related issues including consumer protections. The AEMC will provide advice where necessary to the working group.