Reports and Submissions
Friday, 16 December 2005 01:37
Australia's electricity system is the main cause of our excessive greenhouse emissions but there is no consideration of this, or the cost of greenhouse emissions to the economy, in the design of the market. The Rules of the National Electricity Market (NEM) are inappropriately focused on the supply of coal-fired electricity at the expense of energy savings and renewable energy technologies.
These are the key reports and submissions we have produced:
Research Commissioned by Total Environment Centre
Demand Management and Energy Policy Development: A Case Study of NSW (July 2010, 360KB)
TEC’s new report clearly illustrates the cost-effectiveness of demand management using the industry’s own data. Reducing demand is at least half the cost of building new infrastructure, the report shows, not including the extra costs of generation or a carbon price.
Role of the NEM in Responding to Climate Change Policies (June 2009, 1.06MB)
Report by McLennan Magasanik Associates (MMA) for TEC which shows that:
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efficient and clean development is being frustrated by the energy market
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even with emissions trading, other market failures present barriers to the entry of renewable and low emission generators
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there are stark conflicts between the objectives of the National Electricity Market (NEM) and climate change policies
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the lack of an environmental objective for the NEM has constrained opportunities for demand reduction and energy efficiency
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energy ministers have not fully exploited their role to provide national leadership so that broader convergence issues and environmental impacts are effectively integrated into energy sector decision making
Electricity Network Regulation and Demand Side Responsiveness in the NEM (June 2008)
Report prepared by Headberry Partners and Bob Lim & Co for TEC into whether current electricity network regulation actively minimises demand side responsiveness in the NEM.
Win, Win, Win: Regulating Electricity Distribution Networks for Reliability, Consumers and the Environment (Dec 2007)
Review of the NSW D-Factor and Alternative Mechanisms to Encourage Demand Management, by Institute for Sustainable Futures for TEC (December 2007)
Rule Change Project (Nov 2007)
The National Electricity Rules were originally a voluntary Code devised by industry for the operation of its own National Electricity Market. Despite virtually no public input, the Code became Rules under the National Electricity Law in 2005. The rules favour inefficient consumption and polluting, fossil-fuel generation and lock out energy efficiency and renewable technologies. This project develops specific proposals, justified with reference to how they serve the National Electricity Law objective, to reduce barriers to energy efficiency and distributed generation in the NEM.
"Advanced Metering for Energy Supply in Australia", by Energy Futures Australia for TEC (July 2007)
Assess's the appropriateness of various interval meter technologies available for roll-out across the NEM.
Power for the People Declaration (May 2007)
A coalition of consumer, industry and environment groups calls on elected members of federal, state and territory Parliaments to amend the Australian Energy Markets Agreement and the National Electricity and Gas Laws to require regulators to consider environmental and social impacts when making decisions. Signatories include: Australian Council of Social Services, Consumer Utilities Advocacy Centre, St Vincent de Paul Society, Australian Conservation Foundation, Business Council for Sustainable Energy and WWF Australia.
Jurisdictional Directions Project – How Should Environmental and Social Policies be Catered for as the Regulatory Framework for Electricity Becomes Increasingly National? (2006)
Explores the interface between the NEM and environmental and social issues. Outlines the barriers to streamlining national approach if environmental and social issues remain outside core regulation. Recommends the adoption of the UK approach, tailored to the Australian context, and presents models for how environmental and social policy making and regulation could occur under such a framework. Environmental and social objectives are recommended for inclusion in the National Electricity Law to complement the existing economic objective and guide decision makers.
COAG’s Quandary – What to do with the Energy Markets Reform Process? (2005)
A broad-ranging review of Australia’s energy markets in the context of the Energy Markets Reform Process. Raises questions about the constitutionality of the Ministerial Council on Energy’s (MCE) reforms and National Electricity Law amendments; the design and operation of the NEM; the effects upon the Australian Competition and Consumer Commission’s (ACCC) role as competition watchdog and the dilution of competition reforms; principles and practices in breach of established environmental policies and appropriate technologies; large increases in greenhouse emissions; accelerating investment demands and costs; and the failure to address demand management and energy efficiency.
National Electricity Market – Environmental and Social Issues (2004)
A series of position papers and recommendations by environmental and social groups exploring key NEM issues. Papers address barriers to demand management and distributed generation; interval meters; prices and low income groups; load growth across the NEM; the Mandatory Renewable Energy Target; and emissions trading.
Demand Management and the National Electricity Market (2004)
Explores the reasons behind the failure of Australian energy markets to utilise the huge potential offered by demand management and energy efficiency. The report recommends Energy Savings Funds to establish the energy saving provider market, as well as reforms to the National Electricity Code (now the National Electricity Rules).
Submissions by Total Environment Centre since 2005
Prime Minister’s Task Group on Energy Efficiency Issues Paper (April 2010, 180KB)
In response to the Prime Minister’s Task Group on Energy Efficiency Issues Paper, TEC recommends: a mandatory national energy efficiency goal of zero new demand growth by 2020 with an annual 1.5% reduction to 2030 and beyond; a National Energy Savings Scheme, based on the NSW model, expanded to include a peak demand management mandate on distribution networks; aligning energy policy goals with climate policy goals by merging these two portfolios and fixing the National Electricity Market to remove barriers to energy efficiency and demand management.
AER Regulatory investment test for transmission - Issues paper (Nov 2009, 108 KB)
Although Total Environment Centre (TEC) appreciates the opportunity to comment on the
Australian Energy Regulator’s (AER) Issues Paper on the regulatory investment test for
transmission (RIT-T), the failure of the Ministerial Council on Energy (MCE), the
Australian Energy Market Commission (AEMC) and the AER to put in place a regulatory
framework that prioritises demand management (DM) above inefficient infrastructure
expansion remains a core problem in the National Electricity Market (NEM). The AER’s
current approach to the RIT-T is another symptom of this failure.
The provisions for the RIT-T still do not include demand side or non-network options as a
necessity in any assessment of costs or benefits. Without the requirement to investigate
DM solutions before other options, it is likely that augmentation options will continue to
dominate from the beginning, putting DM solutions at a disadvantage.
AEMC Improved RERT flexibility and short-notice reserve contracts - Rule change proposal
TEC agrees that it is appropriate for reserve contracts to be used for system security
events where practicable. The AEMC has recognised that these reserves may be procured from either generation or demand-side participation. However, it should also be recognised that, to date, demand side response (DSR) in the provision of reserve has been very limited, and this remains an outstanding problem in urgent need of addressing within the overall design of the RERT, and indeed the National Electricity Market (NEM) in general.
The recommendations of the Draft report do not ensure that distribution network service providers (DNSPs) conduct robust economic assessment of non-network options or provide adequate transparency on investment decisions. The recommendations do not provide clearly defined planning processes, particularly in relation to non-network options. The minor improvements recommended, while welcome, do little to address the gaping underutilisation of demand management and distributed generation by DNSPs in the NEM.
AEMC Review of Energy Market Frameworks in light of Climate Change Policies – 2nd Interim Report (July 2009, 136 KB)
This Review once again confirms that energy ministers have not fully exploited their role to provide national leadership so that broader convergence issues and environmental impacts are effectively integrated into energy sector decision making. The AEMC has failed to fulfil its potential by retaining a narrow, short-sighted approach. The Review’s Terms of Reference and the AEMC’s interpretation of them are designed to maintain a status quo that shuts out renewable energy, discourages energy efficiency, promotes poor investments and traps Australia in a dependence on polluting fossil fuel generated electricity.
Australian Government Department of Resources, Energy and Tourism Energy White Paper – Discussion papers (June 2009, 232 KB)
This submission refers to the Strategic Directions Paper as well as a selection of the Discussion Papers. We have mainly commented on the deficiencies around promotion of demand management and energy efficiency within the NEM, since this is the area where there has been the greatest neglect in terms of addressing efficiency in the use of electricity and greenhouse gas emissions.
Notwithstanding the poor standard of current state-based planning requirements
for non-network solutions, it is critical that current best practice is not lost. Rather,
the chronic under-utilisation of demand management (DM)1 and embedded
generation (EG) by networks must be addressed and improved upon. The national
framework must deliver a substantial increase in DM and EG to achieve far
greater network efficiency and a reduction of greenhouse emissions.
Such an increase requires a planning framework that ensures that DM and EG are
considered thoroughly and implemented before network expansion. The
framework thus requires significant change from current arrangements and explicit
guidance from the AEMC.
Total Environment Centre (TEC) supports the initiation of a review by the Australian Energy Market Commission (AEMC) into distribution network planning as directed by the Ministerial Council on Energy (MCE). Our primary concern in this area is that adequate encouragement should be established for distribution network service providers (DNSPs) to maximise demand management1 solutions as a primary step in their planning.
TEC appreciates the effort to include consideration of particular barriers to the uptake of non-network alternatives in the AEMC Scoping paper, but notes a lack of conviction attached to the potential for non-network solutions as well as neglect of the ability of DNSPs to undertake DM actions themselves. As is endemic in the National Electricity Market (NEM), the presentation in the Scoping paper about issues surrounding network planning founders on a faulty principle – that “approval of network expansion and augmentation” is the appropriate starting point for network planning and decision making. This is lined up beside the depiction by the MCE and the AEMC of the fact that networks undertake minimal non-network solutions as a “perceived failure” rather than as an actuality.
MCE Standing Committee of Officials Electricity Distribution Network Planning & Connection Framework – Joint submission with ATA (Mar 2009, 76 KB)
It is important that all connections for embedded generation (EG) should be regulated. There are safety issues for one, and it also establishes a record for the uptake of renewable energy (since most EG is based on renewable forms of energy). It is clear that processes are not consistent across all jurisdictions, which can pose barriers for installation businesses.
TEC and ATA strongly support the principle that connecting EG is not a standard connection process for a customer since there are many issues which distinguish it from regular energisation of a property. Therefore it is highly appropriate that the SCO is developing extra mechanisms for generation.
AEMC National Electricity Amendment (Demand Management) Rule 2009 - Draft Rule Determination (Mar 2009, 35 KB)
TEC is very disappointed that the AEMC has seen fit to reject most of our proposed Rule changes. We are firmly convinced that the main argument used that our proposals do not meet the NEL Objective is a spurious one. Further, the claim by the AEMC that there is only ‘perceived bias’ against demand management (DM) - with the implication that bias does not exist in reality - is contradicted by the simple fact of continued vast under-utilisation of DM and the ongoing and unecessary expansion of infrastructure by networks at the expense of electricity consumers. There is not equal access for supply and demand in the NEM; DM can assist with reliability (and in fact the AEMC is directly targeting this in another review); it is not efficient to overlook non-network solutions.
AEMC Review of Energy Market Frameworks in light of Climate Change Policies – 1st Interim Report (Feb 2009, 144 KB)
We are still convinced the terms of reference fall short of adequately addressing the convergence of the National Electricity Market with the full range of climate change policies being developed at the Federal level. The Carbon Pollution Reduction Scheme (CPRS) and the Renewable Energy Target (RET) are only two of the mechanisms under development with which the energy market framework will interact; the National Strategy for Energy Efficiency and the Climate Change Action Fund are just two examples of other related policies.
There are in addition two significant issues which have not been sufficiently canvassed within the AEMC Climate Change Review itself – demand side opportunities and embedded generation.
AER NSW/ACT Distribution Demand Management Incentive Allowance (DMIA) (Feb 2009, 65 KB)
Notwithstanding the inadequacy of the AER’s current attempts to grapple with DM, Total Environment Centre (TEC) supports the small steps being taken towards the development of a demand management incentive scheme. These measures are in the right direction but are decidedly inadequate. In principle we fully support the concept of a DM innovation allowance, but the sums allocated for each distribution network service provider (DNSP) are insufficient to stimulate significant new demand management (DM) solutions.
NSW Solar Feed-in Tariff Taskforce (Jan 2009, 161 KB)
Total Environment Centre welcomes the New South Wales Government’s proposed feed-in tariff (FiT) as an incentive mechanism for small scale renewable energy. The introduction of a progressive and effective feed-in tariff in New South Wales has the potential to establish the state as a leader in renewable energy in Australia.
However, we note that due to the failure of the Australian Government to recognise additional voluntary reductions beyond Australia’s weak Kyoto and Carbon Pollution Reduction Scheme (CPRS) targets, the NSW FiT will do nothing to further reduce Australia’s greenhouse emissions. Unless this problem is fixed, voluntary actions that reduce greenhouse emissions, implemented as a result of the FiT and other mechanisms (such as the purchase of accredited GreenPower and carbon offsets) will merely shift the burden of reductions away from polluters and onto those who are willing to shoulder more of Australia’s burden.
Review of Energy Market Frameworks in light of Climate Change Policies - Scoping Paper (November 2008)
Although this review focuses attention on the carbon pollution reduction scheme (CPRS) and an expanded mandatory renewable energy target (MRET) at the national level, the terms of reference represent a failure of foresight and resolve. The brief for the AEMC should have been to consider the interaction of the energy market with climate change policy in general and barriers within the NEM to climate change policy in particular. The question should have been asked - what can the NEM offer climate change policy? TEC is calling for the scope of the review to be widened.
Demand management incentives for Energex, Ergon Energy and ETSA Utilities for 2010-2015 - Proposals and frameworks (August 2008)
In a step forward for demand management and energy efficiency, the Australian Energy Regulator is developing demand management incentives for each distribution business. For these businesses in Queensland and SA, the AER is applying the SA concept of a "learn-by-doing" for DM, the business can spend a certain sum on DM without seeking the AER's permission for each project. However, the sums allocated by the AER for each business fall well short of true promotion of DM. Although they are allowing continuation of the D-factor for NSW (a technique for promoting DM), they are refusing to extend it to any other state.
NSW Distribution Network Service Providers Proposals - 2009-2014 (August 2008)
Despite the Australian Energy Regulator's attempts to promote demand management incentives, minimal though they were, the 3 NSW distribution networks proposed shockingly low allocations for DM projects. TEC is concerned that the DNSPs have vastly under-utilised this opportunity to use DM to meet demand and have instead opted for an inefficient, peak-driven, asset-based expansion program.
Review of demand-side participation in the National Electricity Market - Stage 2: Issues Paper (June 2008)
The discussions in our submission to this stage of the review cover a wide range of details that are essential for the proper realisation of DM across the NEM (and see also our submission of March 2008 on a Stage 1 draft report). We argued for such important factors as appropriate arrangements for connection of small generators so they are not disadvantaged; proper network planning so that building bigger is not always the first option; a wholesale market for aggregating DM activities; regulating network business' spending and so on.
National Transmission Planning Arrangements - Draft Report (June 2008)
The establishment of a new authority to regulate transmission (the Australian Energy Market Operator - AEMO) offered a unique and opportune time to rethink policy and principle in light of climate change policies. In that context, TEC pointed out that DM again offers a solution, and should be the overarching principle for decision making.
That is, regulatory mechanisms must include strong incentives for transmission network service providers (TNSPs) to undertake investigation and implementation of DM as the primary option to address potential constraints. We also raised the point that although the companion modifications to the Regulatory Test for investment by TNSPs will improve the consideration of alternatives by TNSPs, they are still not sufficient to facilitate the changes necessary for full implementation of DM.
Cost benefit analysis of options for a national smart meter roll-out (Phase Two) - Regulatory Impact Statement (May 2008)
The Regulatory Impact Statement (RIS) and the cost benefit analysis (CBA) were both defined within limited parameters and ignored the most significant greenhouse, efficiency and informational benefits that could result. This is unacceptable when one of the most critical challenges that Australia faces today is to reduce greenhouse emissions. The potential of smart meters plus in-home displays (IHDs) alongside the use of direct load control (DLC) - for instance for air conditioning and pool pumps - were not properly considered in the analyses. International experience has shown that smart meters can considerably reduce average (baseload) consumption as well as at peak times. It is a lost opportunity that the scenarios tested were so restricted.
Potential development of demand management incentive schemes for Energex, Ergon Energy and ETSA Utilities for the 2010–15 regulatory control period - Issues Paper (May 2008)
This Issues paper formed part of the process of the Australian Energy Regulator (AER) developing demand management incentive schemes for each distribution business. For more info, see our submission on the AER "Proposals and frameworks" paper for DM incentives for these businesses (August 2008).
Cost benefit analysis of smart metering and direct load control - Phase 2 Reports (April 2008)
TEC’s concern is the maximisation of greenhouse benefits from the rollout of smart meters, which relies on the inclusion of specific features since otherwise there are only modest emissions reductions to be gained. If managed properly, smart metering may form an effective part of a suite of programs and policies to address the reduction of greenhouse gas emissions. The results of the CBA indicate there are probable efficiency benefits arising from a variety of factors, and therefore a reduction in electricity demand with consequent reductions in greenhouse emissions. What is not clear is the degree of these potential reductions that the MCE is aiming to achieve. See also our comments on the Regulatory Impact Statement for the CBA (May 2008).
Review of the role of demand side participation in the NEM - NERA Draft Report (March 2008)
The Australian Energy Market Commission (AEMC) initiated a review in 2007 of demand side participation, and this is a report from a consultancy (NERA) on Stage 1 of the review, which focused on transmission issues. NERA's recommendations unfortunately fell well short of proper consideration of demand side opportunities and impediments across the NEM. Our main criticism here was that the potential for the development of incentives was omitted from this report. It is possible to develop regulatory methods that provide incentives for transmission networks to initiate various actions but these were overlooked - these include cogeneration, standby generation, power factor correction, fuel switching, interruptible customer contracts, demand side aggregation and other load shifting mechanisms.
Matters relevant to distribution determinations for ACT and NSW DNSPs for 2009-2014 - Issues Paper (December 2007)
This Issues Paper included the AER's first attempt at developing an incentive scheme to promote implementation of DM by distribution businesses. For the ACT, they recommended a "learn by doing" fund under which the AER would set a fixed sum for each business to establish and experiment with DM initiatives. This fund would apply to NSW businesses as well, alongside the continuation in NSW of the existing D-factor mechanism (which has a number of features, including the ability to pass on DM costs).
Although the concept of a DM incentive scheme is very worthwhile, the sums allocated for each business represente a tiny fraction of their overall capital expenditure. It therefore falls well short of proper promotion of DM. Also disappointing was the clear implication that the D-factor would only be applied to NSW businesses, even though the AER neglected to pick up many of its features in another form.
TEC, the Alternative Technology Association and the Ethnic Communities’ Council wrote a substantial joint submission in response to the recommendations and case studies produced by a consultant (NERA) for the MCE. The AER was to take over regulation of distribution businesses from July 2008, and this was the final review of the Rules governing them (see also our later submissions to the AER on DM incentive schemes). We had two major concerns, firstly adequate implementaiton of DM by DNSPs. The most glaring omission from the recommendations was the promotion of the assessment of non-network solutions for constraints as a primary option. If the national system is to be a replacement for that of the jurisdictions, then the very useful approaches developed so far in a number of States run the risk of being lost. The AER's later initiatives did indeed involve watered-down versions of these approaches, as we feared. We also took issue with the idea of an “economic” CBA for proposed augmentation of networks – to limit such an assessment to purely economic benefits leaves open the possibility that the full benefits of DM and DG will be omitted or undervalued. The other area we focused on was equitable arrangements for connection of distributed generation (that is, small generators, usually of renewable energy). Some of NERA's recommendations represented improved arrangements but they still did not adequately address some of the imbalances for embedded generators. For instance, there is a distinct asymmetry between existing DNSPs and alternative proponents in terms of the scale of the business and consequently available resources. Therefore it is essential that sufficient information is provided – whether it be on constraints or possible solutions – by DNSPs. There was also inadequate consideration of the many barriers facing micro-generators in particular, that is, as householders would use.
National Transmission Planner - Scoping Paper (September 2007)
A new body, the Australian Energy Market Operator, is being established and its brief will include a new national transmission planner. Our submission argued that any such move would be a lost opportunity if the core principles of this new body did not include demand management (DM) as a priority focus. Adopting such a focus would entail investing in substantial new DM expertise within the new authority to ensure that DM is properly integrated into its functions. It would also mean entrenching far greater transparency in transmission network operations, forecasting and reporting, to ensure that the new national planner does not merely accept as a given that new augmentation is required in all circumstances.
House of Representatives Standing Committee - Case study into selected renewable energy sectors (June 2007)
In this submission we focused on the impediments to the uptake of renewable energy within the NEM, which are proving to be a significant limitation to their economic viability. Most forms of renewable energy - particularly small-scale generators - are generally connected to the electricity grid via the distribution system, and there are still many barriers to the viability of distributed generation. Another hurdle for the renewable energy sector is the Objective of the National Electricity Law, which has an inappropriate emphasis on economic efficiency and is being interpreted in such a narrow sense as to entrench significant barriers to investment in renewable energy generation.
Network Incentives for Demand Side Response and Distributed Generation (May 2007)
The discussion in the NERA report to the MCE of the barriers facing DSR and DG was wide-ranging and informative, and the recommendations dealing with removing specific barriers were generally quite useful. There was very little substance, however, in their ideas about incentives so we presented numerous suggestions, including the need for a top-down approach in the form of environmental and social objectives within the electricity law.
Retail Policy Working Group - Supplementary Working Paper (April 2007)
Electricity retailers will be regulated at a national level from 2010, so the RPWG has been working on National Electricity Rules and subsidiary matters that will apply. Our submission to this paper focused on the NEM objective, which we consider to be deficient - the establishment of two extra objectives would address a number of problems to do with climate change and the interests of vulnerable consumers. Our proposed environmental objective addresses the need for an explicit acknowledgement of the environmental damage that the supply and use of energy can inflict, in particular the emission of greenhouse gases which are a major contributor to climate change.
Retail Policy Working Group – Working Paper 3 (February 2007)
In the move to national regulation of electricity retail businesses, we are concerned that protections and initiatives developed at a State level may be lost. We proposed a three-step model to assess whether provisions that currently exist at a jurisdictional level should be promoted to a national level. The major focus is on jurisdictional environmental and social policies and the assessment is based on the degree of commonality within these policies across the states. Licensing has also been used across the jurisdictions to promote environmental and consumerprotection obligations related to government policies and regulations. Any substitute system must equally involve compliance with guidelines developed in line with social and environmental policy.
National Electricity Law amendments package (February 2007)
TEC recommended the additional inclusion of an environmental and a social objective alongside the existing NEM Objective with all three objectives residing in the National Electricity Law; the need for incentives to encourage cost-effective network DM, alongside a Demand Management Code of Practice for distribution networks; and networks should be required to implement non-network solutions where equal to or more cost effective than augmentation.
Energy Reform Implementation Group – Overview of Market Structure - DM (2006)
Total Environment Centre and Alternative Energy Association's submission focused the need for a comprehensive and consistent approach to DM, including the roll-out of smart meters with flexible time-of-use based tariffs; effective incentives for network DM; and a National Energy Savings Fund to help build a robust energy efficiency provider market.
Energy Reform Implementation Group - Overview of Market Structure (2006)
The joint consumer, community environment group submission pointed out that demand side participation is fundamental to the NEM and has been generally ignored by an overemphasis on the supply side. ERIG supported the rollout of interval meters for facilitating DM, but fell short of fully resolving the range of barriers to DM uptake. Uncertainty for market participants as a result of the plethora of state, federal and national initiatives was also raised as a concern for proper functioning of the NEM; the obvious solution is the establishment of a rigorous Federal target for renewable energy, the elevation of jurisdictional environmental regulations to the national level and an effective emissions trading scheme.
IPART's Review of Regulated Retail Tariffs and Charges for Electricity (2006)
Supports the principle of a maximum tariff based on the network plus retail (N+R) cost components, allied with advanced interval meters, higher variable tariffs for critical peaks, and promotion of DM as a risk management tool for retailers.
Effective Competition Criteria for Retail – Consultation Paper (2006)
The criteria proposed for assessing the level of competition in the electricity market fail to take account of the growth of 'green consumers' and GreenPower across the NEM. We suggest modification to assess: the degree of take-up of GreenPower; the range of GreenPower products made available; the level and ease of access for household generators; the level of development of flexible tariffs to incorporate time of use and demand reduction; and the degree of promotion and take-up of advanced meters.
Congestion Management Program: Statement of Approach (2006)
Argues that distribution must be included in the assessment of congestion management procedures, not just transmission networks, since they clearly can contribute to constraints across the system. A DM Code of Practice for transmission and distribution can assist to alleviate congestion. The AEMC should additionally develop a methodology to identify the reliability benefits of DM in relation to congestion.
Proposed Rule for Pricing for Prescribed Transmission Services (2006)
TEC reiterated its position on the need for implementation of non-network solutions where more cost effective than augmentation; the apparent inequities for small embedded generators in regard to connection costs; and supported the AEMC’s proposal that there be a public review of TUoS rebates.
Draft Rule for the Economic Regulation of Transmission Services (2006)
A primary issue is clarification of regulatory mechanisms for the recovery of network investment in DM and the treatment of opex expenditure.
Energy Reform Implementation Group Issues Paper (2006)
A National DM Code of Practice for transmission and distribution networks would help promote consistent DM practice across the NEM. Alongside this, there should be incentives for all market participants to place DM as a first choice solution rather than augmentation of networks or increased consumption of electricity. Transparency of pricing and equity of access for small, alternative generators are issues that must be addressed to ensure the principles of efficiency and competition are met within the NEM.
Reliability Review by AEMC Reliability Panel (2006)
Assessment of reliability must assess groups of generators where relevant, rather than in isolation (eg wind farms) as well as DM in terms of its contribution. More accurate reliability assessment and pricing methodologies need to be developed, as well as provision for adequate access to the NEM for DM providers and DM aggregators.
Rule Proposal for the Regulation of Transmission Revenue (2006)
Extra issues raised by TEC included the need for DM-related capex to be considered as a legitimate expenditure in mechanisms for revenue deliberations, and we proposed the development of a transitional mechanism while transmission networks familiarise themselves with the use of DM, to provide incentives and support from the AER in finding appropriate solutions.
Expert Panel on Energy Access Pricing (2006)
Argues for retention of a revenue cap for transmission; retention of the building block method (CPI-X) for network pricing determinations; regulation of distributed networks at a national level with the application of a revenue cap, not a price cap; provision for an open merits review. Large greenfields projects should not be exempted from regulation.
Impediments to the Uptake of Renewable and Distributed Energy (2006)
Issues raised in response to the draft COPEG are emphasised, including the need for the Code to be implemented within a reasonable timeframe, not deferred indefinitely which would accentuate uncertainty. Furthermore, where an embedded generator would increase the load on the system by a small amount, it is not reasonable to expect that the generator funds augmentation of the whole system.
Draft Code of Practice for Embedded Generation (2006)
Joint submission with Climate Action Network Australia. Supports, in principle, the development of a Code of Practice for Embedded Generation to diminish the barriers for small and renewable electricity generators. Comprehensive provision of information is essential to allow competition with large established businesses. There should be adequate compensation where embedded generators relieve loads on the overall system. We recommend expanding the definitions to include micro (up to 5kW) and mini (between 5kw and 100kw) scale generators, with the development by distributors of standard connection agreements for each class.
National Framework for Distribution and Retail Regulation (2006)
Distribution networks must be dealt with as transmission companies are, as they are equally monopolistic. Distributors should be subject to a revenue cap, not a price cap, so that they are not advantaged by ever-increasing consumption. The most sophisticated interval meters should be required, with costs shared by all customers. Meters should have the facility for remote communication and in-house information displays, and must be allied with flexible tariff systems. The Victorian retail codes of practice should be used as models for the national system, and licensing of retailers should be retained and elevated to the national level.
Review of Electricity Transmission Pricing (2005)
Emphasises the link between pricing and revenue, and argues that prices must be regulated for transmission networks to ensure accurate price signals at all levels of the NEM. Small distributed generators should pay genuine shallow connection costs, DM should be implemented where cost effective and full Transmission Use of System rebates should include the deferral of new transmission augmentation.
Expert Panel Review of Revenue and Network Pricing (2005)
Argues that most details should be dealt with at the national level to ensure consistency. This applies to regulation of revenue and pricing, since networks are natural monopolies providing an essential service. The revenue cap system should be extended to distribution networks.
Proposed Framework Schedule for Transfer of Distribution and Retail Functions (2005)
The Framework Schedule proposed that environmental and DM obligations be left to the jurisdictions. This approach ignores a vital interface between the NEM and the jurisdictions and masks the impact of future regulation and prices (for example a carbon cost) from the NEM. Best practice environmental regulations should be elevated to the national level for consistency and environmental efficacy.
AER Review of Decision-Making in Gas and Electricity Regulation (2005)
Addresses the benefits and disadvantages of judicial versus a limited merits review of decisions. A wider merits review is justified as good government requires independent examination and validation to protect the public interest. A wider merits review allows for a broad range of stakeholders to initiate proceedings and wider public comment once proceedings have commenced.
Review of the Electricity Transmission Revenue and Pricing Rules: Revenue Requirements (2005)
Certainty of regulation and transparency is essential for all stakeholders. Thus the Australian Energy Regulator (AER) should have limited discretionary powers, and both industry and the regulator must fully disclose the process by which decisions are made. DM needs to be recognised as a primary technique for easing constraints and there must be mechanisms for transmission networks to recover costs and reduce their risk.
Review of the Electricity Transmission Revenue and Pricing Rules (2005)
Argues for revenue and pricing regulation to more clearly define the circumstances in which transmission networks can recover spending on demand management (DM).
National Framework for Electricity and Gas Distribution and Retail (2005)
Presents the case that the NEM should acknowledge and support the need for immediate and deep cuts to greenhouse gas emissions through energy efficiency, DM and distributed, renewable energy.
The National Electricity Law Amendment Package (2004)
historic initiative by 21 consumer, community and environment groups that proposes the inclusion of social and environmental objectives in the National Electricity Law.
