AGL recently responded to the Australian Energy Market Commission’s (AEMC) Distributed Energy Resources (DER) Integration consultation.

AGL has consistently advocated that the regulatory framework governing DER integration should empower consumers with choice to utilise and optimise their DER assets (for example solar, batteries and electric vehicles) and to participate in competitive market services which address broader energy system needs.

The AEMC’s consultation considered three rule change proposals brought forward by SA Power Networks, Total Environment Centre together with the Australian Council of Social Services, and St Vincent de Paul Society Victoria. The rule change proposals focus on three key areas:

  • Recognising the evolving role of distribution networks in providing export services;
  • Incentives for efficient distribution network expenditure to support export services; and
  • Pricing for export services.

AGL supports the proposed changes to provide a clearer mandate to distribution networks to provide export services to customers and to align network incentives to reflect this. We also support exploring further opportunities for pricing reform, given the absence of any network pricing signals for energy exports but the question of equity will need to be carefully assessed.

In assessing the rule change proposals, AGL recommends:

  • The assessment framework consider customer choice, consistency in access and pricing outcomes for customers and appropriate risk allocation between market participants.
  • The definitional changes to mandate distribution networks providing export services to customers promotes the development of a market-based framework for the provision of DER services.
  • Aligning the proposed reforms to enable export services and the existing regulatory arrangements for voltage management, including state jurisdictional arrangements and their interaction with the network expenditure regulatory framework.
  • Requiring short term measures that promote greater performance measures and data disclosure to allow for appropriate benchmarking before revising the service target performance incentive scheme (STPIS) framework.
  • The introduction of export charges facilitates improved investment certainty for DER customers.
  • Reward pricing is not introduced until the broader tariff program is progressed, in order to enable the value of DER to be more fully accounted for (including cost-reflective pricing and novel pricing arrangements such as the bulk wholesale network tariff model).
  • Addressing challenges associated with enabling supplementary connection agreements for a network and its customer to negotiate additional capacity, where that investment is not otherwise justified under a ‘net market benefits’ test.
  • Applying the access and pricing arrangements consistently to all distribution connected customers.

A copy of our submission is available here.

AGL is a member of the AEMC’s Technical Working Group and looks forward to engaging further on this important subject.