The Australian Energy Regulator (AER) is paving the way for a competitive neighbourhood battery market to support the energy transition to renewables. This move follows the release of the AER’s updated Electricity Distribution Ring-fencing Guideline.
Ring-fencing separates monopoly network services from energy services to enable competition and more choice for consumers. The AER’s guideline was developed through consultation with regulated network businesses, retailers and consumer groups.
The guideline provides the regulatory frameworks and controls to support 2 key emerging markets in Australia’s transitioning energy sector:
- the deployment of batteries, including community-scale batteries
- regulated stand-alone power systems (SAPS).
‘Community batteries are on the rise as regional towns and local government areas seek to power their communities from renewable energy,’ said AER Chair Clare Savage. ‘Our role is to ensure consumers are better off in this transition.’
Ms Savage said the AER’s ring-fencing reforms also support the new rule to allow network businesses to move customers from a grid connection to regulated SAPS. ‘Our decision supports a network business’s choice to move a customer to regulated SAPS where this is demonstrated to be a lower-cost, more reliable outcome for all consumers.’