The Australian Energy Market Commission (AEMC) has advanced a review of consumer-focused pricing, accelerated by the rising rates of household rooftop solar PV installations.
Upon the publication of the consultation paper, Anna Collyer, the chair of the AEMC, pointed out that one out of every four Australians has solar PV systems. She emphasized the necessity for the AEMC to “ensure that our pricing structures align with the evolving preferences of consumers in utilizing and engaging with the energy system.”
Australia’s abundant solar irradiance has resulted in a significant increase in rooftop solar PV installations, positioning the country as one of the global leaders in installations per capita. It is projected that rooftop solar PV could surpass coal-fired power generation by the year’s end. Additionally, an estimated 26.4GW could be installed by the end of the decade, raising the total capacity to 49.4GW.
As a result, there has been ongoing scrutiny of consumer energy resources (CERs) to assess their potential role in supporting the energy transition in Australia. The AEMC’s examination of electricity pricing is another aspect of this ongoing review.
In addition to rooftop solar PV, the AEMC has emphasized the importance of other distributed technologies such as virtual power plants (VPPs) and community batteries in driving the energy transition.
The consultation will focus on three key areas: market arrangements, the functions of distribution networks, and the roles of retailers and energy service providers.
In particular, the market arrangement aspect will explore various options for consumers to select suitable pricing structures, products, and services that align with their requirements and preferences.
The distribution networks segment will pinpoint the right incentives, products, and services for consumers, ensuring cost-effectiveness and favorable pricing results. Concurrently, retailers and energy service providers will concentrate on packaging and pricing electricity products and services effectively to meet consumer preferences.
“We are adopting a forward-looking perspective in this assessment. Although our existing frameworks have been effective, we must look beyond small adjustments to seize the opportunities that await us,” stated Collyer.
CERs under the spotlight in Australia
In late July 2024, the Australian Energy Market Commission (AEMC) unveiled a fresh draft decision suggesting the empowerment of virtual power plants (VPPs) to directly rival large-scale generators in the energy market. This proposal aims to allow aggregated Consumer Energy Resources (CERs) to be scheduled and dispatched within the National Electricity Market (NEM).
The AEMC mentioned that small resources capable of responding to prices, like backup generators and solar PV systems, could adjust to fluctuations in spot prices. This shift would further promote a decentralized energy system.
The incorporation of Consumer Energy Resources (CERs) is projected to lead to savings of approximately AU$834 million (US$552.1 million) from 2027 to 2050, while also providing additional incentives for the adoption of small-scale solar PV systems.
In a recent development, the Australian Renewable Energy Agency (ARENA) has earmarked AU$5.4 million to establish Australia’s inaugural ‘net zero suburb’ in the 2515 postcode area of New South Wales, known as the Electrify 2515 Community Pilot scheme. This initiative will integrate various technologies, including rooftop solar PV systems, home batteries, water heaters, and heat pumps, to establish a low-carbon, electrified neighborhood in Northern Illawarra.
Brighte, the financial institution led by the project’s founder and CEO, Katherine McConnell, stated that the pilot program will assist policymakers in enhancing strategies to promote electrification.
“This initiative will enable us to gather local insights that can be applied on a national scale, providing valuable knowledge for consumers, tradespeople, industry professionals, and policymakers on the efficient and swift expansion of electrification throughout Australia,” stated McConnell.
“We are enthusiastic about the opportunity to showcase the transformative impact of optimized homes, paving the way for all Australian communities to embrace electrification more seamlessly and accelerate towards a smart, electric future.”
