The Australian Energy Market Commission (AEMC) today made a final rule making it easier and more attractive for more battery and hybrid systems to enter the market and ensure the energy sector keeps pace with new technologies and to support innovation.
More batteries in the market will increase competition and drive down costs. Also, the reform does not move the goal posts on network charges. Energy storage participants will continue to negotiate transmission services and charges, as they currently do.
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Helping customers with small batteries get access to more revenue
For residential and small business customers with batteries the new rules will create opportunities to earn more revenue for their home battery because they can sign up with innovative new aggregator businesses who will pay them for discharging power from their batteries at certain times.
“Currently, some retailers are doing exactly this, by acting as aggregators in conducting virtual power plant trials and paying individual home battery owners hundreds of dollars to access their battery. This is an added income stream that could help small battery owners pay off their batteries sooner. We also see this reform opening up opportunities for more competition and innovative products,” AEMC chair Anna Collyer said.
A new participant category will make it easier for batteries and storage
AEMC has created one single category for battery storage and hybrids to register and participate in the national electricity market (NEM), called the Integrated Resource Provider (IRP). This makes it simpler and easier for anyone who provides storage or a combination of energy services to enter the market.
“For large batteries the rule will cut red tape, reduce costs and logistical hurdles to participate in the market. Batteries will no longer need to register twice, to both draw energy from the grid and send it out, as they currently do,” Collyer said.
Aggregators registered in the IRP will now be able to provide services to the market from generation and load, helping to keep our energy system secure and the lights on.
Hybrids will be able to better manage their own electricity
“We’ve created more flexibility for hybrid energy facilities to manage electricity flows behind a connection point. This means that excess energy is not cut off and can be stored and released into the network later, when it’s needed,” Collyer said.
“So now, for a hybrid with an industrial load such as a manufacturing plant and a solar farm, if there is congestion on the network and as long at the load is scheduled, the solar farm doesn’t have to be constrained. Instead, it can use the energy from the solar plant to run the manufacturing plant. What this means is that the operator is not exposed to the spot market price to purchase energy from the grid and the energy being created by the solar plant is not being wasted. Some stakeholders have told us this could reduce their energy costs by around 15 per cent.”
AEMC isn’t moving the goal posts on network charges for battery storage
The reform maintains the existing framework to allow large grid-connected storage to choose between connecting under a negotiated agreement or the prescribed service.
“We’re not moving the goal posts on network charges. Energy storage participants will continue to negotiate their transmission services and charges. Our intention is for existing network agreements to remain unchanged. So, for example if storage is currently paying zero charges, the intention is that should continue to be the case.
“We know some stakeholders supported an exemption from network charges for battery storage. An important part of our final decision is that we are not suggesting that storage should automatically be paying network charges. And we agree the rules on prescribed transmission services are not designed for price responsive loads,” the AEMC said.
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“However, reforms to network charges for price responsive load involve other issues we need to consider that are broader than this rule change. These issues require further stakeholder engagement and consideration of how all participants, not just storage, will play in the market. We need to work through how it aligns with broader reform work including the Energy Security Board’s proposed congestion management model.
“If the AEMC receives a rule change request from stakeholders we will prioritise this. Network price signals should be considered as the energy market transitions to more price responsive load and to a more dynamic environment.”