A draft rule from the Australian Energy Market Commission (AEMC) supports a competitive market for ‘behind the meter’ energy resources like home battery storage.
Behind the meter, or BTM resources, refers to standalone energy resources on a consumer’s property. They include home battery storage and rooftop solar.
The rule is in response to requests from the COAG Energy Council and the Australian Energy Council (AEC). These organisations seek solutions that will foster competition and innovation, and provide regulatory clarity for Australia’s energy markets.
Reasons for AEMC draft rule on home energy systems
Australia’s energy market is becoming more decentralised. Many consumers are choosing to go off-grid, either partially or totally through solar power. Consumers are also involved in the buying and selling of energy.
Old regulatory frameworks for the energy sector may no longer be appropriate for Australia’s rapidly changing energy market. In addition, more flexible frameworks are needed to ensure benefits to consumers, while encouraging technological innovation.
The new rule aims to:
- Limit the ability of energy networks to own and control BTM assets. In addition, it would allow consumers more control over the use of these assets.
- Restrict distribution network providers from earning regulated returns on BTM resources. Instead, they would need to purchase these resources from consumers or their energy providers.
- Improve clarity and transparency regarding energy regulation frameworks. This includes clarifying which network services are economically regulated and which are open to markets.
- Foster and encourage competition. The AEMC considers that greater competition will encourage innovation in high-tech energy solutions.
- Prevent distribution businesses from favouring benefits to networks over the whole energy system. This is because BTM resources provide multiple benefits that tend to conflict with each other.
- Support the ability of consumers to make meaningful choices through competitive and robust markets.
- Improve regulatory predictability through new distribution services classification guidelines. Also, under the new rule these will be developed and published by the Australian Energy Regulator (AER).
However, it is important to note this is only a draft rule. A consultation period will allow interested parties to respond. Stakeholders have until October 31 to provide feedback and make submissions.