The Australian Energy Market Commission (AEMC) will allow businesses to install standalone power systems (SAPS) for some rural and remote customers to help improve service quality and reduce energy infrastructure costs.
A standalone power system — usually a combination of solar PV, batteries and a backup generator — would be installed by their distribution network but would not be physically connected to the national grid.
The reforms would provide consumers with the same protections, reliability standards and access to competitive retail offers via their retailer of choice as those connected to the grid.
AEMC Chief Executive, Anne Pearson, said the changes would enable those living in locations where power supply is unreliable, or subject to frequent or extended blackouts, to have better quality services and would reduce costs for all energy consumers by avoiding expensive investment in poles and wires where customer numbers are limited.
“New technology using distributed energy resources is making it possible to supply customers at the end of the line in a cheaper and better way.
“The old-fashioned way of centralised generation being distributed by stringing poles and wires to the remote corners of Australia is giving way to solar and battery systems where energy is generated closer to where it is used.
“These reforms mean that people living at the end of the line will get a better quality service with the same protections without paying any more.
“Ultimately, reducing the need for poles and wires to service remote consumers reduces the network costs which make up around 50 per cent of the average electricity bill. It also reduces bushfire risk and the visual impacts of powerlines.”
While consumers can currently go “off-grid” they do so at their own expense and in most cases have very limited consumer protections.
The AEMC reforms recommend that the COAG Energy Council require distribution networks to identify the opportunities for standalone systems and work with their customers where a transition to a standalone power system makes sense.
Trials of standalone power systems are currently underway in several states including NSW, Queensland and Western Australia.
The changes would enable electricity distribution networks to supply their customers with a SAPS where it is cheaper than maintaining a connection to the grid.
Energy Networks Australia welcomed the recommendations, with CEO, Andrew Dillon, saying there was clear evidence of significant potential benefits to customers associated with the deployment of SAPS.
“This decision is a no brainer.
“Standalone power systems can deliver cheaper and more reliable power to customers, especially in remote areas.”
Providing grid-supplied power to people in regional and remote areas is generally far more expensive, with significant poles and wires infrastructure, sometimes extending hundreds of kilometres, required to service limited numbers of people.
Despite the potential benefits, the current regulatory framework prevents distributors from installing SAPS.
Mr Dillon said the AEMC’s recommendations represented an important step toward making the regulatory framework more responsive to technology and market developments.
“Restrictions on the efficient uptake of standalone power systems by distributors would have led to customers paying higher prices with lower reliability,” Mr Dillon said.
“Australia needs to utilise new energy technologies and doing so can be a win-win with lower power bills and better reliability.”