The Australian Energy Market Commission has released a draft determination on how to integrate more small-scale solar and batteries into the electricity grid which includes the opportunity for networks to charge PV owners for exports.

The AEMC’s draft determination addresses “traffic jams” on the network, where falling daytime demand and rising exports of solar energy lead to rising voltage levels in some networks.

“Within 10 years, half of all energy users will be using home energy options like solar. We must make sure this seismic shift doesn’t leave anyone behind because every Australian, whether they have solar or not, deserves an affordable, sustainable power system,” said AEMC chief executive Benn Barr. 

The commission’s suggestions include:

  • Letting networks offer two-way pricing, including rewarding solar and battery owners for sending power to the grid when it’s needed and charging for sending power when it’s too busy.
  • Recognising energy export as a service to the power system in the energy rules to give consumers more influence over what export services networks deliver and how efficiently they deliver them.
  • Flexible pricing solutions at the network level, so customers can choose things like free export up to a limit or paid premium services that guarantee export during busy times.

The suggested changes will accelerate networks’ studies into the uptake of community batteries, where DNSPs in Western Australia, Victoria and NSW are already making progress.

Networks might offer grandfathering for existing solar owners or choose community batteries.

The proposal does not mandate default charges for exporting power. “If a network business wanted to introduce export charging, they would need to consult extensively with customers and have a transition plan detailing how this would be done approved by the Australian Energy Regulator,” the AEMC said in a statement.

Shared solution

Barr said the problem can be viewed as one where solar-owners share responsibility for the integration of new rooftop PV or all energy users share the costs of necessary upgrades.

“One option to deal with more solar traffic – building more poles and wires – is very expensive and ends up on all our energy bills whether we have solar or not,” Barr said. “While the sun may be free, the poles and wires aren’t, so we think the key is to use the power system smarter to avoid costly overinvestment and keep new infrastructure to a minimum.”

The commission is asking for feedback on its draft determination, with submissions due by May 13.

Give and take

The commission modelled the potential impact on customer bills if networks introduced export charges and found that 80% of customers would see their bills drop because they would no longer pay for solar export services they weren’t using. 

For the 20% of customers with solar, there could be a range of export charge impacts, depending on system size. A 4-6kW system would still earn on average $900 – about $70 less than now. But this impact could look very different if the owner took up options that rewarded them for using the system differently – such as self-consuming power.

While export charges on a 4-6kW system might lead to a marginal drop in solar earnings, owners will face that same drop if they are constrained from exporting energy just 10% of the time, the AEMC found. Being constrained 50% of the time would reduce solar earnings by more than $300 a year.

This package of reforms follows a nine-month process of working with stakeholders as part of ARENA’s Distributed Energy Integration Program.

Energy Networks Australia CEO Andrew Dillon said the draft decision recognised changing customer needs and the shift to a more renewable, smart energy grid.

“Without changes to how DER is managed, the ongoing growth in solar means networks would increasingly need to restrict power exports or even block solar connections to prevent voltage spikes and even local black outs,” Dillon said.

“This rule change will incentivise networks to invest in a smarter grid that can better support a two-way flow of electricity as more customers both consume and export electricity.”

Need more detail

The Clean Energy Council said the AEMC’s proposal is complex and that it is anticipating detailed consultation to ensure that the regulations align with the objective to support more rooftop solar.

“It appears as though the all-important job of consumer protection has been passed to the states,” said Clean Energy Council CEO Kane Thornton.

“We need to know whether state and territory energy ministers will allow networks to charge customers whenever they export electricity to the grid and, if so, what customer protections will be put in place.”

It is also critical to understand whether distribution networks will be required to fix up their poor voltage management before this new regime comes into effect, the CEC said.