Rule Change: Open
Overview
On the 29th February 2024, the Australian Energy Market Commission made a draft determination for more preferable draft electricity and retail rules (draft rules) for unlocking CER through flexible trading.
This rule change is seeking to improve flexibility and trading of consumers’ energy resources (CER) to unlock value for consumers and to facilitate better integration of flexible CER into the power system. Integration will deliver a more reliable and secure energy system that would benefit all consumers.
The more preferable draft rules cover three areas:
- Large customers will be able to choose multiple energy service providers for their premises.
- CER (e.g. rooftop solar, batteries, electric vehicles) will be able to be identified and managed separately from other ‘passive’ consumer loads (e.g. lights, fridges) in the energy market, and
- The in-built measurement capability in technology, such as streetlights and EV chargers, will be able to be used instead of additional meters, which will help with better measurement of energy and unlock the benefits of energy efficiency.
The draft rule creates a mechanism that facilitates consumers and their agents (i.e. retailers and aggregators) to identify and manage flexible CER separately from inflexible or passive energy use and for that flexible CER to be better recognised in the energy market and used in the power system. This means opening up opportunities for households and businesses to further capture the value of their CER assets and opportunities for innovation in energy products and services that optimise the value of CER.
Furthermore, the Commission has developed a more preferable draft electricity rule that would create two new meter types with lower minimum specifications to enable technology with in-built measurement capability to be used for settlement and billing. These meter types could be used for technology such as public lights, public EV chargers, and by households and businesses (i.e. EV chargers).
The Commission has taken into account stakeholder feedback to the Directions paper through public forums, technical working group workshops, and bilateral meetings with industry bodies and individual stakeholders.
The Commission also considered the cost benefit analysis undertaken by Energeia, and implementation considerations for both market participants and the market operator (AEMO).
Submissions close on the draft determination on 11 April 2024.
Directions Paper
In August 2023, the AEMC published a Directions Paper that set out the Commission’s initial views and positions for unlocking CER benefits through flexible trading rule change.
In the Directions paper, the Commission split the rule change into three core areas:
- Optimising the value of CER flexibility: Opportunities for separately identifying and managing flexible CER.
- Flexible trading of CER with multiple energy service providers at residential and/or commercial premises.
- Opportunities to improve how energy use is measured for street lighting and other street furniture (such as park BBQs).
The Directions paper provided the Commission’s positions for each of these areas, based on the project team’s analysis and stakeholder input to the consultation paper published in December 2022. Submissions to the directions paper closed on 14 September 2023.
Furthermore, alongside the Directions Paper, the AEMC published Energeia’s methodology paper for the cost-benefit analysis for the rule change.
AEMO’s rule change request
In May 2022, AEMO put forward a rule change request proposing a specific model (with a high-level design) that seeks to enable consumers and the market to separate their flexible CER from their inflexible/passive loads (i.e., lights, fridges) and have them managed and recognised in the wholesale energy market settlements if consumers choose to.
The proposed model has applications for both small and large customers and also street furniture with in-built measurement capabilities.