Department/Agency
Australian Energy Market Commission
Topic
Energy
Type
Ministerial Forum / Standard Setting Body
Announcement date
2/12/2021
Link to announcement
https://www.aemc.gov.au/news-centre/media-releases/incentives-more-batteries-enter-market
Problem being addressed
When the National Electricity Rules (NER) were first drafted there was little storage in the system and the concept of single connection points with the potential for significant energy flows in both directions was not anticipated. As a result the NER do not define storage technologies or the ability to have bi-directional energy flows. Consequentially, there are no specific registration categories and classifications for storage units and hybrid facilities. This means that storage and hybrids must register in two separate categories. In addition to being required to register and participate under two different categories, non-energy costs are currently recovered from storage differently compared to other market participants. Energy storage is playing an increasingly important role and the regulatory framework requires amendment to accommodate this change.
Proposal
To amend the NER to introduce a new participant category, the Integrated Resource Provider (IRP), that will accommodate storage and hybrid facilities in a flexible and technology-neutral way. The final rule makes changes to the recovery of the non-energy costs framework that recognise many participants now have two-way energy flows, and will better reflect how participants use and benefit from the non-energy services the Australian Energy Market Operator procures to operate the power system in a safe, secure and reliable manner. A range of other changes are also made throughout the NER to remove barriers and better integrate storage and hybrid facilities into the National Electricity Market, and to update and streamline the NER.
The Commission consulted on the draft rule change, with public submissions closing on 16 September 2021. Details and reasons for the decision, including how the final rule responded to consultation feedback, are set out in the final determination.
Assessed RIS outcome
Compliant with RIS requirements