The AEMC has proposed a rule change that could ease the way for owners of battery storage to participate in the energy market.
The Australian Energy Market Commission has announced a draft plan it expects will ease the way for battery storage. The draft energy storage plan simplifies registration to participate in the market and streamlines obligations of battery owners.
By creating a category for “integrated resource providers”, the rules will apply to anyone who provides storage or combination energy services – whether it be batteries, pumped hydro, companies that aggregate energy or large-scale hybrid facilities that combine different technologies behind the one connection point (like factories with solar PV and a battery).
Batteries will no longer need to register twice (to both draw energy from the grid and send it out) as they are currently required to do. For small customers, this will open opportunities to sign up with an aggregator who will pay them for using their battery at certain times.
AEMC chair Anna Collyer said the new rule will line up with the commission’s plans to see the energy market evolve into one more accepting of “technology that hasn’t been invented yet”, in anticipation of the Energy Security Board’s post-2025 market design.
“If we make the rules more elastic to focus on what market service you offer rather than who you are, they will stay relevant in the face of rapid change and support energy innovation,” she said.
Battery owners can now store solar generated on their rooftops to use at home or sell it into the grid via a virtual power plant (VPP) when the grid needs support.
“But by and large those assets haven’t really been visible to the energy markets and the operation of the system,” says Andrew Mears, CEO and founder of energy technology company SwitchDin. “It’s about the system catching up with the transformation that’s taking place. A lot of the rules we have were conceived when the energy system was a centralised service.”
The proposed AEMC rule change will allow batteries to be seen as a generator and load, Mears says, and make it much clearer as to how storage assets, or “integrated resource providers”, can operate into the market. “In the past you were essentially a generator or a consumer,” he says. “Now you can be both.”
Batteries under 5MW – which includes some utility-scale assets – will typically be brought into the market via an aggregator. Householders, then, may see their batteries called into service by aggregators who also operate far, far larger assets.
It sounds much the same as VPPs that are already operating under “sandbox arrangements”, so a rule change could free up the market for similar aggregated services.
“The proposed rule changes mean it won’t be a sandbox anymore; these will be the rules for how these things can operate.”
The rule change will make investment in storage under 5MW “a more bankable opportunity,” Mears tells EcoGeneration.
A lot to take in
The Clean Energy Council welcomed the news while admitting the rule change is complex and it may take a while for the implications to be obvious.
“Better integration of storage will support security and reliability, leveraging the capabilities of renewable technology to keep the lights on for consumers, at the lowest possible cost,” says CEC chief executive Kane Thornton.
However, the AEMC has maintained the requirement on battery storage to pay network charges.
“This will result in batteries paying twice – both to connect to the system to supply energy as well as to take energy from the system,” Thornton says. “This fails to recognise the significant benefits that batteries can provide, as both load and generation, which can help support the stability and security of the system.”
The AEMC expects the amount of installed storage to increase by 800% within 20 years. “It will be central to energy flowing two ways,” says Collyer.
The draft energy storage plan is still open for consultation, with submissions due on September 16 and a final determination in October.
This plan is the result of a rule change request from the Australian Energy Market Operator.