Descripción de los Puestos de Trabajo

The electricity market in Australia differs from the UK one as it is split in eight jurisdictions97 and the retail side of the market (i.e. the supplier end) is regulated in all jurisdictions but one (Victoria).

The Australia grid and networks are however facing comparable challenges to the UK’s (increase in intermittent and distributed generation and increase in load), albeit with a different seasonal pattern: peak demand is in summer, due to an increased use of air-conditioning units. Distribution network charges represent over 30% of the electricity price.98

The Australian Energy Market Commission (AEMC) is the national and independent body that makes and amends the detailed rules for, among others, the National Electricity Market and economic regulation of electricity distribution network services. It also conducts reviews of energy markets.

Several changes are being proposed for the network rules and electricity market arrangements, most notably reforms to enable ‘demand side participation’ (DSP: DSR, energy efficiency and embedded generation) and the integration of EVs while minimising impact on the network. After extensive consultation, the AEMC published amendments to the rules and proposed changes to market arrangements in 2012. A brief overview of these changes is set out below.

Rule amendment - Distribution Network Planning and Expansion Framework99 ‘Demand side obligations’ for DNOs have been added to their regulatory framework, with effect on the 1st of January 2013. The aim of these new obligations is for DNOs to give greater consideration to the potential of DSR and DG, and to publish more information to assist potential DSR and DG providers to identify opportunities and understand their value and operating requirements. The AEMC recognises that additional DSR and DG may complicate the forecasting of network demand for DNOs. To address this, the AEMC has recommended the Australian Energy Market Operator is given an increased role in demand forecasting.

Power of choice review – giving consumers options in the way they use electricity100

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Australian Capital Territory, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria, Western Australia

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Retail electricity price estimates, Final report for 2010-2011 to 2013-2014, AEMC

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Published in August 2012, available at http://www.aemc.gov.au/electricity/rule- changes/completed/distribution-network-planning-and-expansion-framework.html

This report lays out an extensive and innovative reform package that aims at providing “households, businesses and industry with more opportunities to make informed choices about the way they use electricity and manage expenditure” and meeting electricity demand by the lowest cost combination of demand and supply side options.

In the context of this study, recommendations of interest are:

 Reward the DSR as part of the wholesale market and link the DG incentive to wholesale prices

The AEMC recommends the introduction of a demand response mechanism under which DSR would be paid the wholesale electricity spot price. In participating directly (or through aggregators) in the wholesale market, consumers’ reward will be independent of retailers’ own commercial interest.

Regarding distributed generation, the AEMC recommends a review of the feed in tariffs approach, where tariffs could be variable and thus able to encourage export during time of peak demand. DG would also be given the option to sell their electricity to a third party, as opposed to automatically selling through their electricity supplier as they currently do.

 Phase in flexible pricing options for domestic users and small businesses Electricity pricing for domestic consumers fosters the same problems as in the UK: the use of load profiles socialises the benefits of DSR, both at wholesale cost and network charges (DUoS) level.

AEMC recognises that calculating individual DUoS would be too complex. It however recommends the introduction of ‘flexible prices’ that include variable DUoS charges. In a first phase, flexible prices would be mandatory only for large users. The threshold for ‘large users’ has not been defined; it would however correspond to a household/office with several heavy load appliances such as EVs, swimming pool pumps and/or large air conditioning systems.

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Published in November 2012, reports and updates are available at

This proposed principle of flexible network charges is comparable to the red, amber, green regime of DUoS for HH settled customers in the UK, with the difference that it is proposed for domestic users, albeit ‘large users’. Medium and small users would continue to see ‘flat prices’, i.e. one single DUoS rate, but would, over time, be offered the option to choose a flexible price.

Other recommendations include Government programs to raise consumer awareness on energy consumption, roll-out of smart meters and use smart meters for settlement as opposed to standard load profiles.

There are also proposals for distribution network incentives: a new incentive package for DNOs to implement DSR initiatives as an efficient alternative to capital investment; and an innovation allowance. New pricing arrangements for DUoS are also discussed – this is however less relevant as standardised charging methodologies have already been developed in the UK.

Energy market arrangements for electric and natural gas vehicles101

The AEMC recommends several amendments to market arrangements to mitigate the network cost impact of the forecasted uptake of EVs, i.e. to encourage charging of EVs outside peak times. Recommendations relevant to the UK case include:

 All EVs should have a metering installation with interval read capability to enable ToU tariffs as well as to help consumers manage their consumption.

 Price signals, as recommended in the ‘Power of choice review’ should be designed to capture most EV owners.

 Technical standards for direct load management should be developed. It is also worth noting that the AEMC is currently running a consultation on the

connection rules of embedded generators. Some amendments being discussed

correspond to aspects already developed in the UK (e.g. standardisation and transparency in connection cost calculations, definition of connection timeframe) while others might provide useful examples, notably whether efficient siting of embedded generators can be influenced by DNOs publishing annual reports that identify network capacity constraints. The consultation runs until June 2013, and the resulting proposed amendments will be accessible on the AEMC website102.

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Published in December 2012, available at http://www.aemc.gov.au/market- reviews/completed/energy-market-barriers-for-electric-and-natural-gas-vehicles.html

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