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Several organisations, including SA Power Networks, the Australian Council of Social Service (ACOSS), the Total Environment Centre (TEC) and St Vincent De Paul, have proposed a review of electricity rules to ensure they support the continued growth of rooftop solar and other Distributed Energy Resources (DER) in Australia.

There currently is no clear regulatory framework specifically applying to the provision of network support for the rapidly growing amount of rooftop solar generation.

In 2019, the Australian Energy Market Commission (AEMC) initiated a 10-month consultation with a cross-sectoral group comprising over 120 stakeholders, across three workshops. The group was asked to review access and pricing issues for DER, including rooftop solar.

Most parties involved agree that a rule change is necessary, but that any changes approved by the AEMC should provide customers with significant notice. If approved, they would not be implemented in South Australia until 2025 at the earliest.

After participating in an AEMC-facilitated forum, the TEC, ACOSS, St Vincent De Paul and SA Power Networks have all submitted proposals on the issue to the AEMC.

SA Power Networks’ proposal would require minimal rule changes by aligning proposed new rules to be applied to supporting new solar investors with those already in place in relation to delivering energy to customers. The changes are not proposed to apply to existing solar customers initially but could over time.

SA Power Networks is proposing a rule change that would ensure:

  • Customers have the right to be able to export energy to the grid from rooftop solar and other DER
  • Networks invest efficiently to support the continued take-up of solar PV
  • Costs to support solar PV are fairly allocated between customers and in a way that is revenue neutral for distribution networks

SA Power Networks General Manager Strategy and Transformation, Mark Vincent, said the company believed the rules needed to be relevant to a 21st century system that increasingly is about DER.

“After more than ten years of customer investment in DER, particularly rooftop solar, the rules need to catch up and facilitate future investment in solar and emerging technology such as batteries and electric vehicles,” Mr Vincent said.

“The issue needs addressing as many electricity networks are reaching their capacity to support DER and new investments are required to support additional DER take-up.”

Mr Vincent said SA Power Networks’ primary aim was to ensure it can continue to support South Australia’s exciting transition to 100 per cent renewable energy supply by 2030.

“We need clear rules that ensure we make appropriate investments in the network that support the choices being made by customers, including those investing in solar, batteries and electric vehicles in the future,” he said.

“Customers would be surprised to know that they don’t have a right to export energy from their systems under the current national electricity market rules.

“Equally, network businesses like us have no clear guidance on the extent to which we should invest to support solar PV and other DER. We also think it’s important for the rules to consider, and provide guidance, as to who should pay for any required investment.

“If the pricing aspect of the proposal is approved, we would expect to see a modest increase in network charges for exports by new solar and other DER customers, although this would be offset by reductions in consumption charges and potentially rewards for exporting energy at certain times – for example by discharging energy stored in batteries at times of peak demand.”

SA Power Networks is proactively thinking about how the rules can best facilitate networks to continue to provide services to customers in the most efficient way possible, and already has nearly 1,500MW of solar generation on customers’ rooftops in SA, with demand continuing.

“We want to accommodate even more solar on our network and provide services that help maximise the benefit of customers’ investment in DER for the community,” Mr Vincent said.

“There is strong stakeholder support for the proposal, including from some in the solar sector and representatives of vulnerable customers. We also recognise some stakeholders are opposed to any change, but we think it is appropriate and time to weigh up the issues and make a decision that gives clarity for everyone.

“In submitting our proposal into the AEMC process, we seek to complement the work and overall objectives of these other rule change proponents by providing our perspectives and experiences as the distribution network at the forefront of Australia’s energy transition.”

How do DER impact network services?

The role of the distribution network has fundamentally changed. Distribution networks now provide two distinct services to customers: the traditional supply of energy to customers’ homes and businesses, and the transport of energy generated by customers’ DER upstream to other customers or the market.

Distribution networks designed to support consumption services have a finite capacity to also deliver export services. While customers’ take-up of DER was relatively low, networks could accommodate additional DER at a near-zero marginal cost.

However, the inherent DER ‘hosting capacity’ of networks is being rapidly approached at local and system-wide levels in many NEM regions. This has implications for the security and quality of supply as well as network costs.

As capacity is reached, either DER customers will no longer be able to connect, or have their export capacity severely limited, or networks will need to invest more to maintain service levels.

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