Distributed Energy Market

Summary

Need

As more and more Australian consumers begin to use photovoltaics and other forms of distributed energy (DE) such as solar water heaters and energy efficiency, downward pressure is being placed on electricity utilities’ traditional revenue streams.

The Distributed Energy Market project aims to help develop a new market in DE services to extend utilities’ roles beyond only electricity supply and sales.

Such innovation will require new business models and appropriate regulatory arrangements to be developed. It also means a significant change for customers from passive participation to active management of some combination of DE options.

Project innovation

This project assessed a range of ways in which customers and electricity utilities might participate in a DER market.

It then developed a structured approach to the development of the regulatory framework required for such a market. This framework identified the need for equal competition between supply-side and demand-side operations of the electricity market.

It showed that Integrated Resource Planning should be used to ensure DE options are considered on an equal basis to network augmentation and that network operators should be able to participate in the DE market without being disadvantaged.

The project showed that the market should be designed to increase consumer choice and strengthen their rights of access to renewable resources. It also highlighted the need for appropriate measures to stimulate the market, and showed why these will be much less effective if the above aspects of the regulatory framework are not also developed.

The results of the project were delivered through a number of reports and articles as well as through a workshop for key stakeholders.

Benefit

Although there has been much discussion about the need for something to be done to allow increased uptake of DE in a manner that is suitable for utilities, this project is the first to develop a properly integrated package of measures.