Plug & Play 2: enabling distributed generation through effective grid connection standards

Energy Electricity Markets Precinct indicators

Plug and Play 2: Enabling distributed generation through effective grid connection standards is the second report for this project. It follows a consultation paper released in February 2017, titled Plug and Play: Facilitating grid connection of low emissions technologies.

For this report, we interviewed stakeholders from the gas, telecommunications and aviation industries about the characteristics of an effective process for developing industry standards and codes of practice. These discussions suggested two important features: regulatory oversight, and active and informed representation of different interests. Both of these features are helpful for the development of fair and effective standards, and at least one is necessary. These features are largely absent from the current process for developing distribution network access requirements, and this report suggests actions that could be taken to address this.

The Australian electricity market is at the forefront of the distributed electricity transition occurring internationally. This transition promises a move to customer-led markets located in distribution networks, providing a range of services to the network as a whole. To enable this transition, it is essential that customers can easily access the network by connecting their equipment. This will ensure customers can participate in the range of projected financial and energy security benefits produced through this evolving market.

Current arrangements do not always provide customers with easy access to the distribution network for their equipment. Connection is controlled by a complex array of laws, requirements and standards that vary between different networks. Under state laws, distributors are responsible for managing the safety and performance of the network, and have control over connection to the network. Distributors can base their access requirements on Australian Standards, International Standards and/or their own particular conditions. There is no regulatory oversight of distributors’ network access requirements.

Customer access to the network may also be constrained by customers’ absence from the process of developing access requirements. While networks are explicitly required to consider network safety and performance, they are not required to balance customer interests against these features. Some distributors include Australian Standards as part of their network access requirements. Although Standards Australia encourages the representation of a range of interests in the standards development process, broad stakeholder representation is not consistently achieved on Standards Australia committees. Across a range of industries, Standards Australia experiences difficulties in attracting appropriately skilled customer representatives, or customer proxies such as manufacturers, to sit on its panels. As a result, even the inclusion of Australian Standards in distributor access requirements may fail to provide balanced consideration of customer interests.

The development process for network access requirements therefore results in increased costs for customers wanting access to the grid by connecting their equipment. Our first report, Plug and Play: Facilitating grid connection of low emissions technologies, identified a range of situations where variations in distributor network requirements have increased customer costs or reduced customers’ ability to achieve their objectives. This report influenced the Australian Energy Market Commission’s discussion of the near-term enablers required for distributed PLUG AND PLAY 2 4 energy to flourish in the National Electricity Market (NEM). Energy Networks Australia (ENA) has also identified the importance of developing more consistent connection processes across the different distribution networks and is currently consulting stakeholders on principles for common distribution network connection processes. This new report is intended to feed into the current ENA process.

We have identified three actions that could improve the process for developing network access requirements. Action 1 is intended to address the need for oversight and transparency of distribution network access requirements. Actions 2 and 3 each address the need for better customer representation in the development of access requirements.

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