Australia’s energy consumers are witnessing the most significant industry disruption since electrification and the regulatory framework is yet to catch up, according to the ENA.
At the ENA’s recent event, Reorientating Regulation, attendees heard that Australia’s energy consumers are witnessing the most significant industry disruption since electrification and the regulatory framework is yet to catch up.
The forum focused on how energy regulation can stimulate, rather than frustrate, innovation in network services and new markets in distributed generation, storage and demand management; and customer’s need for choice and control in their energy use.
ENA CEO, John Bradley, said the explosion of new service and technology opportunities in the energy market had clear implications for traditional regulation of services.
“Australia has 1.4 million household generators, one of the hottest potential markets for storage in the world and enormous opportunities to integrate cleaner energy sources to meet long term emission targets.
“We are witnessing the most significant change in the energy industry since electrification – and that isn’t just disrupting energy markets, it is challenging traditional regulation and policy.
“The forum asks Australia’s best energy minds to shape regulation that unlocks better price outcomes and better services for customers. We will hear from the voice of consumers, the national regulator, credit rating agencies, investors and network providers,” Mr Bradley said.
Mr Bradley said some of the key issues that need to be addressed include:
- what energy services should be regulated now customers might rely on multiple suppliers;
- how regulation can avoid stifling incentives for innovative services while ensuring safe and reliable delivery of energy; and
- opportunities to minimise infrastructure investment costs in a rapidly changing market, with predictable regulation.
“There is widespread agreement that an integrated grid will be essential to unlock a clean energy transition enabled by new technology and customer choice.
“Regulation must be predictable enough to minimise the major investment costs borne by consumers but flexible enough to allow vibrant innovation by both the network and the new businesses that thrive on it.
“One of the key choices that regulators will face in the future will be how much of our infrastructure spending is funded in long term debt or by increasing our reliance on indexation of asset bases.
“Current regulation ‘back-loads’ cost recovery which effectively defers costs to consumers in the future.
“It is revenue neutral for the network company –but like a home loan, there can be savings to consumers if future regulation takes advantage of the option to pay down this debt more quickly, particularly if the future is more uncertain,” Mr Bradley said.