New Energy Insights Bulletin – Rule Change: Unlocking CER Benefits Through Flexible Trading

The Australian Energy Market Commission (AEMC) released its draft determination titled “National Electricity Amendment (Unlocking CER benefits through flexible trading) Rule” (Proposed Rule) on 29 February 2024.

The Proposed Rule attempts to empower customers who deploy Consumer Energy Resources (CER) (including rooftop solar resources, battery storage systems, and electric vehicles, which are also known as Distributed Energy Resources) to maximise their value to consumers and facilitate further integration of CER into the National Electricity Market (NEM).

We round up the three key takeaways of the Proposed Rule below.

  1. Flexible trading of CER with multiple energy service providers for large customers1

Large customers currently engage with multiple energy service providers by using embedded networks or by establishing additional connection points within the distribution network (thus obtaining a second National Metering Identifier).

The Proposed Rule eliminates the need to use embedded networks this way (noting that embedded networks were not established for the purpose of enabling large customers to engage multiple energy service providers) and allows for large customers to establish secondary settlement points and engage multiple energy service provider to manage their CER at these points. This move is expected to support greater participation of CER trading in wholesale and ancillary services markets.

  1. Optimising CER flexibility2

Energy consumption through CER is more flexible than energy consumption via ‘passive’, inflexible consumer loads (for example, traditional home appliances). Presently, consumers who have adopted CER must manage their CER the same way that they manage ‘passive’ consumer loads.

Under the Proposed Rule, passive consumer loads will be treated differently to CER loads, and consumers may select a retail product to manage their CER that is different from the way they manage their ‘passive’ consumer loads. This, therefore, also creates an opportunity for energy service providers (retailers and aggregators) to offer different tariffs depending on the type of energy load.

These changes incentivise retailers to orchestrate CER and lower barriers for third-party aggregators to operate in the market by improving the visibility of CER in the system.

  1. New meter types supporting in-built measurement capabilities3

The Proposed Rule creates two new meter types (‘type 8’ and ‘type 9’) that will enable technology with in-built measurement capabilities to be used in settlement and billing. This allows for reduced costs of measuring energy use, as technology with in-built meters may be used in place of installing additional meters.

The introduction of these meters will accommodate connection arrangements which are not presently within the NEM metering framework. AEMC has identified that these new meter types will support the deployment of electric vehicle chargers (including residential, large, and public uses), and street furniture connections (for example, street lighting, traffic lights and public BBQs).

Submissions on the Proposed Rule can be made through the AEMC’s website and are due by 11 April 2024. The Commission will publish its final determination and more preferable final rules in July 2024, and the rules will be implemented on 2 February 2026.

Stay informed!

Learn more about the impact and trajectory of CER in Australia in our upcoming New Energy Quarterly (Autumn 2024). To stay informed, please reach out to our expert Matt Baumgurtel or our New Energy team.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects.

1AEMC, Draft rule determination: Unlocking CER Benefits rule change, Chapter 3: Flexible trading with multiple energy service providers at large customer premises, 29 February 2024.

2AEMC, Draft rule determination: Unlocking CER Benefits rule change, Chapter 4: Opportunities to optimise CER flexibility for small customers, 29 February 2024.

3AEMC, Draft rule determination: Unlocking CER Benefits rule change, Chapter 5: Measuring energy flows from in-built technology (e.g. street lights, EV chargers, other street furniture), 29 February 2024.