20 June 2013 — Property owners with trigen systems in their basements could be inching closer to connection to the grid if a draft determination from the Australian Energy Market Commission due on June 27 finds in their favour.

A rule change request was put forward by the Property Council of Australia, ClimateWorks and Seed Advisory. It follows agitation from property owners who have trigen or cogeneration systems onsite, but which produce more power than required by the building, making them unfeasible to run. Selling electricity to the grid would change the economic equation and produce more low emissions energy.

Submissions to the review have been made by the Green Building Council of Australia, the City of Sydney, City of Melbourne, Origin Energy, The Energy Networks Association and SP Ausnet.

Under the current rules, there is a lack of certainty over whether an application to connect a co/trigeneration system to the grid would be successful, what the timeframes for consideration would be, and overall cost of connection.

The proponents of the rule change said that the terms of connection agreements are “onerous, one-sided and not negotiable”, and the rules needed to be changed to make for a more efficient, unambiguous system.

The rule changes proposed include:

  • Providing an automatic right of connection to the grid and standard access terms
  • Enabling embedded generators a right to export electricity to the grid
  • Allowing distributors to charge an optional fee-for-service to promote collaboration with proponents during the connection process
  • Obliging distributors to publish annual network reports identifying where capacity is limited

“This rule change request reduces unnecessary barriers to the adoption of cogeneration and encourages investment by providing lower costs and better investment returns,” the submission said.

The benefits could include:

  • reduced connection costs for current and prospective proponents and distributors
  • lower payback periods on low carbon and renewable energy investments
  • a boost to adaptation and innovation in the electricity market
  • enhanced economic and energy efficiency and productivity
  • the potential to support adaptation to a low carbon economy
  • reduced demand on the electricity network, especially peak demand
  • the potential to lower escalating electricity prices for businesses and households

Submissions to the AEMC on the proposal were received from a number of stakeholders, including the Green Building Council of Australia, the City of Sydney, City of Melbourne and Origin Energy.

GBCA said it supported changes to the rules that would bring a more consistent, Australia-wide approach to connecting embedded energy generators to the grid, however some of its member were concerned that excluding embedded generators from network augmentation costs may result in negative long-term consequences for the energy network.

Origin Energy, which acquired trigeneration company Cogent, said it “broadly supported” the recommended solutions. However, it was concerned about whether amending the connections framework to address embedded generation could give rise to a problem for large scale connections.

City of Melbourne’s director city planning and infrastructure Geoff Lawler said building owners and developers had identified long timeframes, uncertain costs and lack of clarity around technical requirements as significant barriers, which had delayed projects or prevented them from proceeding.

The City of Sydney, which recently dropped its trigen plans citing pricing and regulatory barriers, said the impacts on embedded generators when exporting was not allowed undermined the economics and carbon abatement potential of projects.

Distributors were not so supportive, however.

The Energy Networks Association – the peak body for the transmission and distribution networks – said there were genuine technical challenges in integrating distributed generation into what has until recently been a system of centralised power generation and one-way flows.

It said there would be particular challenges for each project, and therefore recommended nationally consistent technical standards but not rigid rules on connection applications.

SP Ausnet agreed that each connection was unique, and therefore standardised information and access requirements were not are not a practical solution.

Ausgrid said it didn’t agree there was a gap in the regulatory framework for connecting embedded generation, and it did not support the proposed changes in their current form.

After the draft determination is released, submissions will again be sought before a final determination is made.

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  1. There has been a lot of discussion in the energy industy for years now regarding the expected increase in peak demand on the grid, which will occur for approximately 10% of the annual operation. Embedded generation has the potential to reduce peak demand and save billions of dollars on infrastructure upgrades by Network Distributors as the installation cost of the embedded generation is the responsibility of the property owner. There is a golden opportunity here to save money and reduce CO2 emissions on a large scale that will be missed by the AEMC without changes to the rules.

    Energex, the Distribution Network in SE Queensland, have developed a standard approach to the Network Connection Contracts for embedded generation. They may request specific design requirements, depending on the connection location to the grid, but the process is streamlined. Other Network Distibutors require Network studies to be completed by the applicant (property owner) to determine fault current limits of the grid in that particular location, prior to commencement of the Network Connection Contract. The AEMC should also be reviewing why this is the applicants responsibility, as one would assume that this requirement means that the fault current limits of the network are unknown?