After previous attempts to slap solar households with unfair charges or the “sun tax”, the AEMC has finally come up with a proposal that looks to the future rather than attempting to maintain the status quo. In a recently released review—“Integrating Distributed Energy Resources for the Grid of the Future”—the AEMC has acknowledged that there is a huge and valuable resource in the amount of rooftop solar DER that Australians have installed.

Before we go any further, we should probably explain a few things...

• AEMC is the Australian Energy Market Commission – the organization that develops the rules that govern the operation of the Australian energy market;
• DER means Distributed Energy Resources, which includes rooftop solar;
• DNSP means Distribution Network Service Providers, such as Ausgrid, SApower etc – the owners and maintainers of the poles and wires.
  

Every year tens of thousands of Australian homes are making the switch to solar – with more and more households exporting solar energy to the grid, there are both grid benefits and challenges that need to be addressed. If left unchecked, rising solar uptake could cause more wide-spread grid issues, resulting in band-aid solutions like solar curtailment or prohibiting connection of more DER to the grid. These are bad outcomes for consumers and a clean energy grid. 

Restrictions on solar input to the grid have already been imposed by several DNSPs due to the instability that electricity forced into the grid by DER installations can cause, mainly by increasing the voltage on the network. Due to this, up to now the AEMC and most of the DNSPs have concentrated on the costs DER will impose on the networks, rather than the benefits that distributed generation can provide. Discussions around this topic have previously been very one-sided and Solar Citizens has had to campaign to stop rule changes that would allow networks to unfairy charge solar households for exporting cheap and clean energy to the grid.

However, the new AEMC report takes a different approach. It has now decided that it is time to change the network rules to accommodate the ever-increasing amount of DER as a matter of urgency. The report explores how household solar and battery storage owners can be incentivised to support the grid and reduce the cost of network maintenance, while also being discouraged to export during times when it would cost or strain the network. By introducing dynamic pricing to signal when and where it's best for DER to export to the grid, it will avoid the need to spend large amounts modifying or expanding the grid.

The rule changes required are currently only vaguely defined, will be fiendishly complicated, will take some time to formulate and impose, and will require detailed planning and cooperation from all parties – the DNSPs in particular, but also generators, retailers and customers. Draft rule change submissions will not be accepted until early to mid next year. 

For a little light reading, the report can be found here.

Blog post written by volunteer Peter Youll.