A rule change made by the Australian Energy Market Commission will make it simpler for buildings with small embedded generators under five megawatts to connect to the grid and sell excess energy.

The request for a change to the electricity rules was made by the Clean Energy Council, with the resultant rule working to help businesses generating energy through co/trigeneration, solar, wind and biomass connect to the distribution network in order to obtain back-up power or sell excess energy.

The rule provides two pathways to connection to the grid: a flexible, more open and shorter connection process, or a longer, more defined and detailed connection process. The rule also broadens the information that distributors are to provide on their websites regarding embedded generator connections.

The AEMC said embedded generator proponents would have the discretion to use the connection process that best suited their needs, which would result in efficient and timely connection of smaller generators to the distribution network.

AEMC chairman John Pierce said the change would reduce barriers for connecting generators to distribution networks, increasing competition along the supply chain.

“The final rule balances the need to maintain system security with connection processes suitable for the wide range of embedded generators that want to participate in the electricity market,” Mr Pierce said.

“We have widened the connection process options for smaller embedded generators to improve regulatory certainty and clarity as the emerging energy services market responds to changing circumstances and consumer needs.”

The final rule commences operation on 1 March 2015. It follows a rule change completed in April relating to connection of larger embedded generators to distribution networks.

2 replies on “Rule change to help green buildings connect to power market”

  1. Alan,
    I appreciate your viewpoint. A couple of things to keep in mind though.
    1. Getting the electricity market started required an unprecedented degree of co-operation and sense of common purpose between the relevant State governments and between the Commonwealth and the States. If they had waited until it had been fully designed before getting underway there is a good chance we would still be waiting.
    2. Markets continuously develop over time and as experience overseas has shown, the order matters. I think in the case of the NEM the sequencing has been spot on. Wholesale market first, then network regulation and retail competition, and then demand side participation as per our 2012 Power of Choice review. The pace at which you move through these sequences is of course a separate point.
    3. The AEMC can make and amend the NEM rules and anybody can submit a rule change proposal……except the AEMC itself. So subject to satisfying the National Electricity Objective, the pace and direction of market development is in your (in the broadest sense of the term) hands and as the Clean Energy Council has demonstrated in this particular case.

  2. While it’s great to see this change, the fundamental problem is that it has taken 15 years to introduce a change that should not have been needed if the electricity market had been designed properly in the first place. The Productivity Commission’s criticism in its 2013 report on electricity networks still stands: progress is ‘glacial’. And not even global warming seems to melt the barriers any faster.

    AEMC needs to redesign the market to welcome emerging competitors, not allow incumbent businesses to unfairly use their market power to block change.

Comments are closed.