Rule Change: Completed
Overview
Overview
On 12 August 2021, the AEMC made a final determination on updates to the National Electricity Rules (NER) and National Energy Retail Rules (NERR) to integrate distributed energy resources (DER) such as small-scale solar and batteries more efficiently into the electricity grid.
The final determination makes way for a future of solar, batteries and electric vehicles, bringing power networks into the 21st century. It recognises the significant uptake of solar PV and other DER by consumers and provides a long-term, sustainable plan to get more solar into the grid.
Key aspects of the final rules
The final rules have three key components.
Clear obligations on distribution businesses to support more DER connecting to the grid
- Clarification that export services are part of the core services to be provided by distribution businesses
- Removing complete export bans: customers seeking an export connection must be provided a non-static zero export limit, unless exemptions apply
- Requiring distribution businesses to plan for the provision of export services and explicitly explain their approach to DER integration in their regulatory proposals
- Extending the existing planning and investment arrangements to exports, giving the AER the ability review distribution businesses’ expenditure plans
Enabling distribution businesses offer a range of options to encourage solar owners to limit solar waste, save money and benefit the grid
- Removing the existing prohibition on distribution businesses from developing export pricing options, which can help get more out of the network infrastructure
- Requiring all distribution businesses to offer a basic export level in all their tariffs without charge for 10 years
- Introducing new customer safeguards to help the transition to export pricing, including:
- requirements that existing solar customers cannot be put on export pricing arrangements until 1 July 2025 at the earliest – unless they elect to do so
- requirements on the distribution networks to develop and have an approved export tariff transition strategy describing any plans to phase-in export pricing over time
- an increase to tariff trial thresholds to support distribution businesses to develop and trial new, innovative network tariffs.
Strengthening customer protections and regulatory oversight by the AER
- Distribution businesses will be required to consult widely and test and trial the options they put forward using Export Tariff Guidelines to be developed by the AER
- The AER will:
- undertake a review considering incentive arrangements for distribution businesses to deliver efficient levels of export service and performance
- report annually on the performance of distribution businesses in providing export services to customers
- develop customer export curtailment values (CECVs) to help guide efficient levels of investment for exports and support other regulatory processes
- update its connection charge guideline to reflect the restrictions imposed on static zero export limits.
The rule change requests
On 7 July 2020, SA Power Networks (SAPN) submitted a rule change request seeking to amend the NER applying to the economic regulation of distribution network service providers (DNSPs) in the National Electricity Market (NEM). The proposed amendments may also require consequential changes to the NERR.
The SAPN rule change request is one of three requests that aim to better facilitate the efficient integration of distributed energy resources (DER) for the grid of the future. The other requests were submitted by the St Vincent de Paul Society Victoria on 02 July 2020, and the Total Environmental Centre jointly with the Australian Council of Social Services on 7 July 2020. The three requests were consolidated by the Commission on 12 November 2020.
The rule change requests followed a nine-month process of working with stakeholders as part of the Australian Renewable Energy Agency’s (ARENA’s) Distributed Energy Integration Program (DEIP).
The program was led by a steering group of consumer representatives, industry association and energy market bodies. As a result of that work, the St Vincent de Paul Society, the Total Environment Centre, the Australian Council of Social Services and South Australian Power Networks requested the AEMC change the rules.
The rule change process included extensive engagements with a range of stakeholders. As well as considering the issues raised in submissions to our consultation paper and draft determination, the Commission formed a technical working group to consider key issues. Seven technical working group meetings were held over the course of the rule change process. The technical working group’s meeting notes can be found below.