Australian Energy Regulator's vision for managed transition to renewable energy

After a week of combative debate in parliament and with the approach of COP23 in November, Australia's position on its commitment to emissions reduction is in embarrassing disarray with no sensible national energy policy and no clarity on the Government's undertaking to finalise a Clean Energy Target.

However, in a presentation to the Disruption & the Energy Industry Conference, Jim Cox, a board member of the Australian Energy Regulator, has described Australia's energy market as being in transition toward renewables and greater use of decentralised energy production, emphasising the need for the National Energy Market to tackle the challenges of decentralisation and intermittent supply within that reality.

Mr Cox said the changes in the energy market were being driven by consumers, who are demanding an energy market which allows them to:

  • have a say in how energy is generated

  • generate electricity themselves

  • manage their own energy demand

  • assist networks in managing demand

  • choose a retailer who meets their needs.

Mr Cox rejected suggestions that competitive energy markets should be re-regulated to control the changing market, arguing that markets drive innovation and innovation drives down the cost of technologies, in particular renewables.

“As the regulator, we welcome innovative ideas and the potential benefits to consumers.

We seek to empower consumers to make informed decisions about their energy use and encourage them to engage in the market and for the market to respond to consumer demand – including the demand for cleaner, renewable energy.”

The Australian Energy Regulator recently published its draft decision on the new demand management incentive scheme and innovation allowance, which provides electricity distribution businesses with an incentive to undertake efficient expenditure on non-network options relating to demand management. Comments on the proposed scheme are due by October 12.

Mr Cox outlined some innovative approaches to demand management including GreenSync's decentralised energy exchange to be implemented on the United Energy network so that people with solar panels and battery packs can trade their electricity on the market directly with consumers of the electricity at a fair price. Another example was TasNetworks which is currently trialling a demand management solution at Bruny Island, subsidising customers with solar panels to install batteries that will support the network during periods of network constraint.

The full text of Mr Cox's address is available here.

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