Unlocking Consumer Energy Resource (CER) Benefits Through Flexible Trading: A New Era in Energy Management

Introduction

For the broader energy industry, the AEMC’s new rules are a significant step towards a more decentralized and consumer-centric energy market. Australian consumers are driving one of the fastest transformations of electricity systems in the world through record-breaking investment in Consumer Energy Resources (CER). By enabling flexible trading, the AEMC is laying the groundwork for a more resilient and sustainable energy system, where consumers, businesses, and embedded networks all play an active role in managing energy resources.

The rule change is about the integration of CER in the NEM. It makes a series of changes that would allow consumers or their service providers to manage CER in ways that provide benefits to the customer and the energy system.

Key Features of the New Framework

The new framework introduces several key features designed to enhance the management and utilization of CER:

1. Secondary Settlement Points (SSPs):  

• Large customers can now establish SSPs at their premises, allowing them to engage multiple financially responsible market participants (FRMPs) to manage their flexible CER. This provides an additional avenue to the currently used, embedded network framework, for large customers to access these benefits.

• Existing embedded networks will remain embedded networks even if an SSP is established on the premises. The final rule does not require large customers currently using embedded networks to switch to the flexible trading framework. The new flexible trading framework is intended to be a more transparent and efficient mechanism to engage multiple FRMPs and establish SSPs.

2. Creation of Opportunities for Small customers to optimise CER flexibility
   While SSPs enable large customers to obtain a second NMI and engage multiple Financially Responsible Market Participants (FRMPs), the revised rules will also provide more options for small customers to manage their "passive" energy loads (e.g., lighting, fridges) and "flexible" CER (e.g., battery, EV charger). However, small customers will not be able to access multiple FRMPs at their premises.

3. New Meter Types Introduced
   While not as high profile to many, the introduction of new meter types that will allow the use of in-built measurement tools at lower technical and performance requirements than revenue-grade meters. This is designed to encourage more flexible metering arrangements, and management of energy use.

4. Voluntary Participation
   The new arrangements are voluntary for large customers and leverage existing market systems. They are designed to scale with the level of uptake and benefits, ensuring that implementation costs remain relatively low.

Impact on the Network Exemption Guideline, Embedded Networks & more

The AER will need to review and update the guideline to take into account this rule change. The Commission anticipates that classes such as ND07 will be retained, as they would still be needed for metering installations that do not have a Metering Coordinator.

Implementation and Roadmap

The AEMC’s final determination outlines a clear roadmap for the implementation of these new rules. The changes will be phased in over the next few years, with key milestones aimed at ensuring a smooth transition for all stakeholders. The majority of the rules are scheduled for implementation by 1 November 2026.

However, arrangements related to in-built metering at primary connection points in technology, such as streetlights and EV chargers, will be enforced earlier, by 31 May 2026. This recognition is based on the readiness of participants to adopt these arrangements and their alignment with AEMO’s work plan. Furthermore, the stipulated timeline requires AEMO’s procedure changes to be finalized by 30 September 2025 and the AER to make changes to relevant guidelines by 1 November 2026, to enable participants to prepare and adhere to these implementation dates.

In April 2024, AEMO released a draft High Level Implementation Assessment (HLIA) for the rule change to provide stakeholders with the opportunity to provide feedback on expected system changes and implementation timing.

Benefits of the New Rules

The new rules are expected to bring several benefits to consumers and the energy market:

• Enhanced Consumer Engagement: By making it easier for consumers to use and get value from their CER, the new rules encourage greater consumer participation in the energy market. Over 3 million households and businesses in Australia already have solar panels, and electric vehicle sales are expected to grow rapidly

• Smoother Power System Operation: Proper integration of CER and Distributed Energy Resources (DER) like community batteries, SRA arrangements and great access to these offerings, will help the power system operate more smoothly. This integration will lead to benefits such as a cheaper energy supply for consumers and industry

• Cost Savings: The new rules aim to reduce costs associated with metering and enable consumers to access cost savings from the actual measurement of energy flows, as opposed to using algorithms to estimate energy flows

Conclusion

The AEMC's new rules for unlocking CER benefits through flexible trading represent a significant advancement in energy management. By enabling large customers to establish SSPs, separate their energy loads, and engage multiple FRMPs, the new framework promises to enhance consumer engagement, improve power system operation, and deliver cost savings. As Australia continues its transition to a lower-emissions energy system, these changes will play a critical role in ensuring a more efficient and sustainable energy future. These rules are more than just a regulatory update; they are a blueprint for the future of energy in Australia. Integrating CER into the electricity grid is a critical part of a renewable superpower economy where consumers can access clean, affordable and secure energy.

References

https://aemo.com.au/-/media/files/initiatives/unlocking-cer-benefits-through-flexible-trading/unlocking-cer-benefits-through-flexible-trading---draft-high-level-implementation-design.pdf?la=enere

https://www.energy.gov.au/sites/default/files/2024-07/national-consumer-energy-resources-roadmap.pdf

https://www.aemc.gov.au/rule-changes/unlocking-CER-benefits-through-flexible-trading

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