AGL supports network reform to improve access for distributed energy resources

In March, the Australian Energy Market Commission (AEMC) published its draft rule determination on access, pricing and incentive arrangements for distributed energy resources (DER).

AGL recently responded to the draft rule determination. A copy of our formal submission is available here.

AGL supports the Draft rule determination which provides an important package of reforms to improve access of DER to the electricity system. This will be facilitated through clearer distribution network export service obligations and a more sustainable regulated revenue model for the provision of distribution network infrastructure to support export services into the future.

We support the removal of NER clause 6.1.4 which prohibits the use of system charges for export services to address equity concerns regarding the extent to which non-DER participants cross-subsidise DER customers’ use of the distribution network. We also consider it important to establish a more viable financial stream to support distribution networks’ planning and investment in export services. This is particularly so given the substantial role that DER is anticipated to play in Australia’s energy markets and the risk of curtailment in the absence of appropriate distribution network infrastructure investment.

AGL also welcomes the AEMC’s proposed reforms to support network tariff innovation, including to enable pricing to retailers or market small generator aggregators. We consider these changes will facilitate greater retail market innovation to support the continued uptake and market participation of DER.

Nevertheless, in implementing these reforms, we consider it important that the regulatory framework continues to support simplicity to facilitate consumer engagement.

Moreover, the introduction of two-way network pricing should not empower distribution networks with de facto market functions associated with the co-optimisation of DER services that would be better served by a more competitive-based framework.

We consider a range of safeguards should be established to complement the proposed reforms and maximise the consumer benefits that will flow from the proposed reforms, that we elaborate in our submission.