Australian distribution companies could be restricted from owning behind-the-meter energy storage
Distribution network operators in parts of Australia could be restricted from owning or operating energy storage assets, in a measure proposed by the Australian Energy Market Commission (AEMC) to stimulate the market for behind-the-meter batteries.
The AEMC administers rule-making and market development in the country’s energy markets, including the wholesale National Electricity Market (NEM), which covers much of eastern and southern Australia. Its role differs from the perhaps better-known Australian Energy Market Operator (AEMO), which is responsible for more of the day-to-day running of many of the same markets.
The new rule, which AEMC has just put into the draft stage, is aimed at supporting a “competitive market” for behind-the-meter, or customer-sited, energy storage systems. The rule would prohibit distribution networks from being able to earn regulated returns on distributed energy resources – including energy storage – installed behind-the-meter.
Therefore, if a distribution network business wants or needs to access the flexibility to store and dispatch energy or leverage the ability of energy storage to perform other services to the network, it would have to procure the services from consumers or from energy services suppliers.
AEMC said that if distribution companies were to own and operate the resources themselves, there was a risk that they would use the energy storage systems to benefit their own networks “at the expense of maximising benefits for the electricity system as a whole”.