On the 31st of October 2022, the Australian Energy Regulator (AER) published it's draft Network Exemptions Guideline (Version 7) for public consultation. This will directly impact Embedded Networks across the NEM, including Victoria.
Throughout this article, we will touch on some of the major updates that are proposed within the Draft Guideline.
Streamlining and Condensing the Guideline
The AER has made significant efforts to streamline sections of the document, simplifying the language used and improving the layout. Certain content from the original Guideline have been moved from within the conditions and existing sections, to the appendix or removed where it is better delineated as to what constitutes a condition and what is required from the applicable conditions.
Specific clarity has also been added to the meaning of Owning, Controlling and Operating in application of the guideline to remove ambiguity, as well as further details on the eligibility requirements for completing a retrofit conversion of an existing distribution system.
Most notably, the AER has updated the title of the guideline to be the "Network Exemptions Guideline".
The AER is proposing an approach where, although all relevant parties who own,control or operate the network must register, a 'Primary Registrant' may be nominated to perform specific applicable conditions on behalf of the other stakeholders. This is currently proposed as a choice that registrants can make when completing their exemption application. An example of this would be the primary registrant becoming a member of the relevant ombudsman scheme. The final updated guideline would stipulate which conditions a primary registrant may perform on behalf of the network.
Small Generation Aggregator (SGA) Schemes
The AER's Notice of Draft goes into great detail regarding their consideration of SGA's within Embedded Networks and their reasoning for facilitating their inclusion within the Network Guideline. The proposed Version 7 guideline will allow for the existing exemption classes of NDO1, NRO1 and NRO2 to include networks that feature SGA's. Specifically, Exemption Class NRO2 permits the appointment of an SGA to provide market services on their behalf in line with the updated definition. These definitions have also been adjusted to ensure alignment with the proposed Integrated Resources Provider Role detailed in the AEMC's 2021 Rule Change, pertaining to integrated energy storage systems.
The Embedded Network Manager
The requirement to appoint an ENM has been reinforced within the Draft Guideline,stipulating a maximum 30 business day timeline for a site to appoint an ENM in scenarios where early appointment is not required (trigger events). It is also proposed that the requirement for an ENM may be deferred in scenarios of no practical retail competition (i.e. regional Queensland), where there is also no potential benefit, or there is an increased cost to the customer.
Explicit Informed Consent
There is a continued movement in the Draft Guideline to Explicit Informed Consent from Express Written Consent, increasing the burden of information provision requirements of EENSP's to also include standardised information made available by the AER for customers. This information is outlined within the eligibility requirements for application to retrofit an existing site, and evidence provided to the AER upon application to show this is included within the marketing plan.
Retrofit applicants in particular should note, potential customers must be advised of both the benefits and potential detriments of consenting to a retrofit of their network. This must also occur prior to an individual applying to the AER for approval to register a network exemption. Significant updates have been made to this process and we advise all stakeholders involved in these projects read both the Notice of Draft and Draft Guideline in detail to understand these changes.
Disconnection/De-energisation Protections for Energy Only Customers
The protections for disconnection detailed within the Retail Exempt Selling guideline are proposed to be adopted within the Network Exemption Guideline, for customers experiencing payment difficulties of the Network tariff to the EENSP. The same procedures for reconnection, disconnection and prohibited times are all proposed to be included within this guideline.
As the first major update of the AER's Electricity Network Service Provider - Registration Exemption Guideline since it's release in 2018, we strongly recommend all stakeholders operating or engaging with Embedded Networks and their applicable use cases become familiar and provide feedback to the AER in the form of a submission.
You can find a copy of the Draft Guideline and Notice of Draft via the two links below:
Network Exemption Guideline Version 7 (DRAFT)
Notice of Draft Instrument
Make a Submission and Review Consultation