Distributed energy resources
Summary: DEIP Dynamic Operating Envelopes Workstream: National Regulatory and Policy Design Issues (PDF 235KB)
The Distributed Energy Integration Program (DEIP) is exploring the value that dynamic operating envelopes (DOEs) could offer to the energy transition.
On 12 November 2020, over 40 participants from across the industry — consumer groups, networks, research organisations, market bodies, retailers, aggregators and other organisations — met to discuss national regulatory and policy design issues relating to DOEs.
Participants considered four key policy and regulatory topics:
- Regulation of allocation principles
- Standardisation of customer connection agreements
- Information and market processes
- Monitoring and enforcement.
Participants identified areas under each topic that would benefit from national consistency and then discussed how this might be achieved. This document summarises those discussions.
Read more about the DEIP Dynamic Operating Envelopes Workstream
About the themes
Regulation of allocation principles: Allocating network capacity is the process of determining how much network access each customer is able to use at any given time without breaching the physical limits of the grid. The allocation principles that underpin the efficient and equitable allocation of network capacity through DOEs are a foundational technical, regulatory and policy design issue.
Standardisation of customer connection agreement: Customer connection agreements are currently developed separately by each local network service provider. The high-level content of these agreements are approved by the AER but the current process has limited customer input. This high-level oversight is a deliberate aspect of the Rules to allow for recognition of local conditions and state obligations. The customer connection agreement will typically call up other documents and guidelines – some of these are on the DNSPs website and some are Australian Standards or state Regulations. This diversity of requirements can make it difficult for manufacturers and installers to be compliant.
Information and market processes: The group explored interactions between DOEs and market and aggregator systems and processes. These were generally considered complex and would require a dedicated effort to work through the extensive detail. Of particular importance were the specific information flows that would allow aggregators to factor in DOEs into their market participation strategies. It is important not to underestimate the cost and effort required to amend aggregator and market systems. The system level at which DOEs would be assigned needs to be resolved in order to understand the extent of aggregator responsibilities and therefore what market processes are appropriate.
Monitoring and enforcement: The group explored the question of how the application of DOEs should be monitored and how to ensure compliance. This was from two specific perspectives: What kind of monitoring, reporting obligations, incentives and/or penalties should be applied to DNSPs to ensure that they are allocating capacity and setting DOEs in accordance with national or jurisdictional guidelines, and providing customers transparency around this process. What kind of monitoring, technical standards and enforcement regimes are required to ensure customers and customer equipment conform to the DOE and associated requirements in the connection agreement.