The Australian Energy Market Commission (AEMC) has introduced new rules that will enable customers to maximise value from flexible consumer energy resources (CER) and exercise greater control over their energy use.
CER are smaller-scale energy resources owned by customers, which can produce, store, or vary how they use energy. There are newer forms of CER such as solar panels, batteries, and electric vehicles, and more traditional assets such as hot water heaters and pool pumps.
Australia’s energy landscape is being transformed by the uptake of these resources and consumers becoming more engaged in the different ways they can use them.
By 2030, it’s predicted at least one in eight households will have a battery or electric vehicle, or both. By 2050, that number is expected to rise to one in four. Around one in six free-standing Australian homes have solar panels, with one in two expected by 2040.
AEMC said that these trends represent an enormous opportunity for Australia’s energy future. CER, along with resources such as neighbourhood batteries, have an important role to play in the power system. They can help reduce overall system costs, improve reliability, and achieve a secure, low-emissions energy supply for all consumers.
The final rules, in response to a request from the Australian Energy Market Operator (AEMO), will introduce the following 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 (such as EV chargers and batteries) from passive loads (like fridges and lights) in the energy market, leading to more product and service options for consumers
- Market participants will be able to use in-built measurement capability in technology such as EV chargers and smart streetlights, eliminating the need for separate meters
AEMC Chair, Anna Collyer, says these rules are an important enabler in the context of the National CER Roadmap.
“They make a series of incremental changes that, alongside other reforms, will unlock substantial benefits from flexible CER for consumers and the system as a whole.
“If these resources are integrated well, the power system will operate more smoothly, and consumers and industry will enjoy the benefits of cheaper supply.
“A range of studies has estimated the net benefit of effective integration and coordination of CER to be up to $6.3 billion by 2040,” Ms Collyer said.
This rule change will empower consumers to access new energy products and services, enabling them to maximise value from their flexible CER and better manage their energy use.
It also aims to promote innovation and competition in the electricity retail sector by simplifying the process of separating and unlocking value from CER.
For example, these rules will make it easier for retailers to offer households EV charger products with built-in metering and dedicated tariffs. This means consumers could potentially receive separate billing for their EV charging, distinct from their regular household energy use. If they choose, they could also trade excess energy from their EV back to the grid.
The in-built metering arrangements will also make it easier to deploy public infrastructure such as EV chargers and smart streetlights. AEMC said that modelling shows this could generate benefits of up to $100 million over two decades, including $16 million attributed to emission reductions.
“We are committed to reforms that pave the way for the innovation required to meet the challenge of integrating CER, knowing that if we do nothing, all consumers will face higher costs,” Ms Collyer said.
The AEMC’s 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 reforms are interconnected and wide ranging. They include reviewing pricing structures, speeding up the rollout of smart meters, and improving consumer access to real-time energy data.
“Additionally, we have published draft rules to create greater visibility of price-responsive resources, such as household batteries, to make it easier for them to participate in the market. We think this could help AEMO and networks to operate the system more efficiently, ultimately leading to lower prices and emissions,” Ms Collyer said.
“These reforms are crucial pieces of the CER puzzle. They create opportunities for innovation, helping consumers reduce bills and participate more actively in our energy system, while improving grid management and reducing emissions.”
Featured image: T. Schneider/shutterstock.com
