Rule Change: Completed
Overview
On 15 August 2024, the Australian Energy Market Commission (AEMC) made more preferable electricity and retail rules in response to a rule change request submitted by the Australian Energy Market Operator (AEMO). This rule change request was developed as part of the Energy Security Board’s (ESB) consumer energy resources (CER) implementation plan.
The final rules make a series of changes that, alongside other reforms, will unlock substantial benefits from CER for consumers and the system as a whole.
The rules will enable three key arrangements:
- Large customers will be able to engage multiple energy service providers at their premises more easily- to manage and obtain more value from their CER.
- Energy service providers for small and large customers will be able to separate and manage ‘flexible’ CER from ‘passive’ loads in the energy market - leading to innovative products and services for consumers.
- Market participants will be able to use in-built measurement capability in technology such as electric vehicle (EV) chargers and smart streetlights - to enable the delivery of innovative and essential products and services at lower cost.
These arrangements will make it easier for energy service providers to offer products and services to households, businesses, and the public sector, to unlock the value of flexible CER. The arrangements will also provide a strong foundation for CER to be delivered to and integrated into the National Electricity Market (NEM).
The new in-built metering arrangements will also make it easier for market participants to deploy public EV chargers and smart streetlights, which could deliver up to $100m in benefits over 20 years as a result of reduced metering installation costs, reduced maintenance costs, reduced wholesale costs, and emissions reductions.
These arrangements will be voluntary, so that energy service providers and consumers can take up these arrangements when and how they see fit.
This final determination is part of a broader suite of reforms aimed at supporting the energy transition and unlocking the full potential of CER for the benefit of all consumers. These include a pricing structure review, work to accelerate the rollout of smart meters, integrating price-responsive resources into the NEM, and improving consumer access to real-time energy data.
The full range of CER reforms are detailed in the National CER Roadmap.
In making its final decision, the Commission has considered stakeholder feedback, regulatory impact analysis, and the national electricity objective (NEO) and national energy retail objective (NERO).
The majority of the rules will be implemented by 1 November 2026. Arrangements related to in-built metering at primary connection points for assets like street lighting and public EV chargers will be implemented earlier - by 31 May 2026 - recognising the readiness of participants to take up the arrangements and alignment with AEMO's work plan.
Background
In May 2022, AEMO put forward a rule change request proposing a specific model (with a high-level design) to enable consumers and the market to separate their flexible CER from their passive loads (i.e., lights, fridges) and have them managed and recognised in the wholesale energy market settlements if consumers choose to.
The proposed model had applications for both small and large customers and also street furniture with in-built measurement capabilities.
On 8 December 2022, the Commission published a consultation paper. We received 60 submissions to the paper.
On 27 April 2023, the Commission extended the period of time for making the draft determination to 12 October 2023 under section 107 of the NEL and section 266 of the NERL.
On 3 August 2023, the Commission published a directions paper that set out the Commission’s initial views and positions for the unlocking CER benefits through flexible trading rule change. We received 54 submissions to the paper.
On 12 October 2023, the Commission extended the period of time for making the draft determination to 29 February 2024 under section 107 of the NEL and section 266 of the NERL.
On 29 February 2024, the Commission published a draft determination. We received 48 submissions to the draft determination.
On 4 March 2024, the Commission extended the period of time for making the final determination to 11 July 2024 under section 107 of the NEL and section 266 of the NERL.
On 20 June 2024, the Commission extended the period of time for making the final determination to 15 August 2024 under section 107 of the NEL and section 266 of the NERL.