AEMC releases final report on distribution market model

AEMC

Sep 14
AEMC releases final report on distribution market model

The vision for a competitive ‘distribution market’ has recently been outlined in a report released by the Australian Energy Market Commission (AEMC).

The report highlights some of the dynamic opportunities presenting to consumers in the distributed energy and technology space due to developments in battery storage, electric vehicles, smart appliances and the emergence of peer to peer trading of electricity.  There is also benefit for the wider electricity network through assistance in managing peaks in demand.

The AEMC’s Reliability Frameworks Review is currently looking into “enablers” for the long-term vision of the competitive distribution market and how improved co-ordination between distribution level markets and the wholesale market is key to enable more opportunities for distributed energy resources.

The AEMC has made a number of findings on the flexible and resilient arrangements to underpin a competitive distribution market for the future and the report states the following priorities:

  • developing fit-for-purpose Australian Standards for distributed energy resources, which could include setting up an electricity sector-specific body to develop those standards
  • considering if the current access model for distributed energy resources to use the network is appropriate as networks become congested as more resources connect
  • developing an understanding of the control levels that network businesses need to have over distributed energy resources to maintain system safety, reliability and security
  • establishing more transparent and standardised processes for connecting distributed energy resources, to avoid onerous technical requirements which can increase costs, or loose requirements which can create safety issues
  • obtaining more dynamic information about congestion and technical issues on networks, at more localised levels, so all market participants can spot opportunities and make better decisions on how to invest in, and operate, distributed energy resources.

The AEMC considers that any evolution of the distribution systems needs to be driven by consumers (or chosen energy service providers). While there needs to be consideration of how the frameworks should evolve to facilitate choice, it is imperative that the evolution of the market should balance the benefits from a customer-led uptake of the distributed resources, with the needs of networks to manage the system impacts to maintain safe, secure and a reliable supply of electricity.