The South Australian Government is currently consulting on the implementation of the national regulatory framework to support the deployment of stand-alone power systems (SAPS).
AGL recently responded to its consultation paper, a copy of which is available here.
We are generally supportive of the national regulatory framework that was developed by the Australian Energy Market Commission (AEMC) to facilitate the transition towards SAPS. We consider the National Framework will support greater optionality in efficient alternatives to traditional electricity supply arrangements. This approach ensures energy consumers have access to more reliable and affordable energy supply, particularly where the costs of providing grid connected services may be high, for example in remote locations and areas which are difficult to access or susceptible to bushfires.
At the same time, the National Framework focusses on maintaining competitive solutions in generation and retail services for those consumers who transition to SAPS, which the AEMC consider fundamental to ensuring cost competitive outcomes for consumers. The National Framework limits distribution networks ability to provide SAPS generation services through the Australian Energy Regulator's (AER) Electricity Distribution Ring-fencing Guideline (Ring-fencing Guideline) and the proposed exemptions framework.
While these measures provide reasonable safeguards to ensure energy consumers do not pay more than they have to for energy supply, we consider that additional safeguards are required to ensure the Ringfencing Guideline exemptions framework is complemented and reinforced against high cost and inefficient network investments and/or favour investment proposals from affiliated ring-fenced entities to the detriment of consumers.