The Australian Energy Management Operator (AEMO) and Energy Networks Australia recently released an important paper, entitled OPEN ENERGY NETWORKS, as the first step in an extensive round of consultation on how Australia can best, ” transition to a two-way grid that allows better integration of Distributed Energy Resources for the benefit of all customers.”

Distributed Energy Resources (DER) are distribution level resources, which produce electricity or actively manage consumer demand (e.g. PV solar systems, batteries) or demand response (hot water systems, pool pumps, smart appliances and air conditioning controls).

In summary, the paper notes:

Distribution network businesses are responsible for operating and maintaining their networks within technical and safety requirements. AEMO is responsible for grid reliability, system security and operating the market. In this paper, Energy Networks Australia and AEMO are exploring how best to facilitate the entry of DER into the market. Our objective is to identify both the system requirements that must be addressed in the formation of a two-way system, and to obtain a better understanding from traditional and new market participants how from a network and market operator perspective, we can reduce barriers to entry into the system and best facilitate innovation and competition at the grid edge.

Informing these considerations are the following key principles:

  1. Simplicity, transparency and adaptability of the system to new technologies

  2. Supporting affordability whilst maintaining security and reliability of the energy system

  3. Ensuring the optimal customer outcomes and value across short, medium and long-term horizons – both for those with and without their own DER

  4. Minimising duplication of functionality where possible and utilising existing governance structures without limiting innovation

  5. Promoting competition in the provision and aggregation of DER, technology neutrality and reducing barriers to entry across the National Energy Market (NEM) and Western Energy Market (WEM)

  6. Promoting information transparency and price signals that encourage efficient investment and operational decisions

  7. Lowest cost.

All stakeholders, including consumers are invited to respond to the actions proposed in the discussion paper and engage with the regulators in the coming months to further inform and guide the creation of a framework for the effective integration of DER.

Comments on the consultation paper are welcome by 3 August 2018.

During the consultation period a series of stakeholder workshops will work through various issues to inform the development of a White Paper. AEMO and Energy Networks Australia will communicate the timing and location of these workshops in due course.

AuthorRay Dennis