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Local Generation Network Credits (Rule Change): Submission to AEMC


Lynne Gallagher

Energy Consumers Australia (ECA) welcomes the opportunity to respond to the Australian Energy Market Commission’s (AEMC) Draft Determination on the National Electricity Amendment (Local Generation Network Credits) Rule Change (the Rule Change).

ECA’s view is that markets need to be designed and regulated in a way that ensures that consumers pay no more than necessary for reliable electricity services in a new, more dynamic local energy market. In this sense ECA sees the Rule Change as a missed opportunity by the sector, while recognising that the Draft Determination by necessity responded to a specific proposal for payments to local (embedded) generators.

In this submission, ECA supports the AEMC’s Draft Determination. However, before providing reasons for our support, we propose the need for a review by the COAG Energy Council as a matter of urgency, of the impediments and barriers to more mature pricing and payments mechanisms in retail electricity markets. In the absence of more dynamic, local retail pricing there is a risk of inefficient and costly investment being made that potentially imposes higher costs than necessary on all consumers. Such a review could provide valuable input into the Energy Council’s consideration of the future of the National Electricity Market and the role of renewable generation (including the work of the Independent Review being led by Dr Alan Finkel) and the Energy Council’s agenda on cost-reflective network pricing.

The “uber” innovation that consumers are looking for in the retail energy market is the enabling of peer-to-peer trading at a local level which could include allowing them to credit their excess generation to other consumers. It would be timely to explore with retailers the issues that need to be addressed to enable peer-to-peer trading, including virtual net metering.

Read the full submission here.