Energy Spectrum Australia

Energy Spectrum Australia | Issue 15

Welcome to the fifteenth edition of Energy Spectrum Australia.

The below extract has been taken from our fifteenth edition, and if you have enjoyed reading this article and want to read more about the latest developments in the Australian energy market, please contact Ben Cerini, b.cerini@cornwall-insight.com.au for more information.

EMO to build new DER marketplace for consumers to participate in the NEM

Announced on 2 December, the Australian Energy Market Operator (AEMO) launched its Victorian Distributed Energy Resources (DER) Marketplace trial, Project Edge, in partnership with AusNet Services and Mondo.

Located in the Hume region of north east Victoria, the $28mn project will further the development of a replicable model for trading of electricity and grid services from DER that can be scaled across the National Electricity Market (NEM). The project will enable 50 residential customers to access the platform to trade electricity and grid services from DER, such as rooftop solar and batteries, increasing the reliability and resilience of the whole system.

“As the uptake of rooftop solar, home batteries, home energy management systems, electric vehicles and smart appliances is expected to grow, it is clear that these technologies are going to transform our electricity system,” commented Australian Renewable Energy Agency (ARENA) CEO, Darren Miller. “This trial will help to develop trading mechanisms to maximise the economic benefits to customers and the system and minimise the costs of supply to all energy customers.”

If successful, the project will scale up to 1,000 residential, commercial and industrial customers, and will focus on developing the roles and responsibilities of market participants, including distributed network service providers (DNSPs), such as AusNet Services and aggregators, such as Mondo, lowering electricity costs for customers and managing challenges associated with a decentralised grid, as the sector moves towards an energy-as-a-service model. ARENA will also provide the required funding to assist in the development of the software and systems underpinning the DER marketplace, and provide an oversight around the distribution electricity system to AEMO and network operators to ensure grid balancing services, alongside ancillary services and energy from DER within the operational constraints of the distribution network.

“Our trial with AusNet Services and Mondo, and financial support from ARENA will facilitate the trading of aggregated electricity services from energy devices in peoples’ homes and businesses in north-east Victoria,” stated AEMO Executive General Manager of Emerging Markets and Services, Violette Mouchaileh. “The trial forms part of AEMO’s DER Programme to enable a smooth transition from a one-way energy supply chain, to a world-leading system that maximises the value of DER for all consumers through effectively integrating DER into Australia’s power systems and electricity markets.”

“The AusNet Services and Mondo teams are excited to be using our locally developed energy management technology to demonstrate how a future energy market can support fully realising the financial and environmental benefits of all our energy resources,” added AusNet Services Executive GM of Growth and Future Networks, Chad Hymas.

The establishment of the live trial of a DER marketplace is a welcome step in moving towards a truly integrated electricity system that seeks to optimise all the assets on both the transmission and distribution networks. Understanding how the DNSP might create dynamic operating envelopes and engage for dynamic network services would allow DER to be part of the solution rather than just adding to network constraints over the next decade. The structure of the trial market will follow the Hybrid Model market set out in the Open Energy Network Project where Energy Networks Australia states that “the DNSP would manage and communicate distribution network constraints (operating envelopes) to DER participants, via aggregators and retailers and AEMO. AEMO would manage a market platform that optimises all DER bids for wholesale electricity and system support services.” A key part of this programme will be the transparency of both networks in providing information to AEMO about the system as well as the potential markets that could be established i.e. there may be disincentives for DNSPs to create new markets where DER can participate if this mean less capital investment in the network which would be rate based and generate increased revenues for DNSPs. A larger cost sharing structure may need to be developed to provide an incentive for DNSPs to actively optimise the network and transition costs from capex to opex.