The AEMC issued the Integration of Energy Storage: Regulatory Implications discussion paper in October 2015 (the Discussion Paper). A number of consumer organisations have made submissions on this topic but ECA has not.
In this paper ECA outlines principles for the consideration of the integration of energy storage in the context of the long term interests of consumers. The intention is to frame the approach that ECA will take in relation to further processes, including the AER review of the ring-fencing guideline.
The objective of the national energy market arrangements is promoting the long term interests of consumers with regard to price, quality, reliability, safety and security of supply of energy services. Within the various laws this is specified as the promotion of efficient investment in, and operation and use of, energy services.
This objective is best pursued by promoting competition in markets where it is viable.
In this paper ECA outlines how allowing DNSPs to directly participate in storage markets can only foreclose the market for storage services. Even fully effective ring-fencing will not prohibit foreclosure.
Ring-fencing is not an effective way to control the damage that will occur to competitive markets by enabling DNSPs to invest in storage. The benefits that DNSPs can gain from embedded storage and behind the meter storage will be more efficiently delivered by the development of vibrant markets for these services.