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Australian Ministerial Council developing rules for Uptake of Renewable and Distributed Generation and Embedded Generation

Posted by gmarkets on 14 September, 2007

The NERA Economic Consulting (NERA) and Allen Consulting Group (ACG) paper (NERA/ACG) would be used as the basis to develop the national arrangements for electricity distribution network planning, connection and connection charge arrangements, according to the Ministerial Council on Energy Standing Committee of Officials. High level report considered: “This consultancy builds upon and complements other current and previous MCE and industry work streams,” the committee said. “The May 2005 NERA / Gilbert + Tobin report Public Consultation on a National Framework for Energy Distribution and Retail Regulation set out a ‘best practice’ approach to the regulation of energy distribution and retailing, including network expansion and connection and capital contributions. The report provided high level consideration of the national framework for distribution and retailing, having regard to the arrangements that existed in jurisdictions. Aspects of that report’s recommendations have been considered by NERA/ACG in providing advice on a national framework for electricity distribution network planning and connection arrangements.”

Renewable and Distributed Generation Working Group (RDGWG): “Work completed under the RDGWG initially focused on increasing clarity and consistency between the different jurisdictional regimes,” said the committee. “This work included the development of a discussion paper on impediments to the uptake of renewable and distributed generation and a draft Code of Practice for Embedded Generation (CoPEG) prepared for the Utility Regulators Forum (URF). Submissions to these papers were reviewed by CRA International.” The final CRA report titled Impediments to the Uptake of Renewable and Distributed Generation was attached to the committee’s report.

Distribution and retailing functions to be transferred: “Under the Energy Market Reform work program, the MCE has committed to transferring distribution and retailing functions to the national framework, the report continued. “These functions will be transferred in two packages:

• Package 1: transfer economic regulation of distribution electricity networks to the national framework; and

• Package 2: transfer non-economic distribution and retail regulation to the national framework.

As part of this commitment, the MCE is developing the initial national rules for these packages. Therefore, rather than reviewing the jurisdictional regimes to remove impediments to the uptake of renewable and distributed generation (DG) and demand side response (DSR), the initial electricity distribution revenue and pricing rules (part of the economic legislative package) and the NERA/ACG report consider removing the impediments to the uptake of DG and DSR from the perspective of the new rules being developed.”

Network losses and other issues debated: “The April 2007 NERA report Distribution Rules Review – Network Incentives for Demand Side Response and Distributed Generation provided a review of the proposed electricity distribution revenue and pricing rules, with the aim of removing impediments to the uptake of DSR and DG,” the committee noted. “The report raised several issues requiring further work including the treatment of network losses. In EMR Bulletin 95, SCO responded to the NERA report titled Distribution Rules Review – Network Incentives for Demand Side Response and Distributed Generation. Recommendations from that report which are relevant to the electricity distribution revenue and pricing electricity rules will be included as part of the economic legislative package. Recommendations or outstanding issues from that report which are relevant to the network planning and connection work stream have been considered further and addressed in the NERA/ACG paper.”

National Framework for Distribution and Retail Regulation: “In June 2007, the Retail Policy Working Group (RPWG) released the Allens Arthur Robinson (AAR) Composite Consultation Paper on options for the major components of distribution and retail regulation (items 6 to 15 of Annexure 2 of the Amended AEMA). The Composite Paper consolidates five earlier Working Papers, the second of which addressed distributor obligations to provide connection services and the interface with retailers and embedded generators. Stakeholders are invited to make submissions on recommendations presented in the NERA/ACG report by Friday 28 September 2007,” said the committee.

Reference: The Ministerial Council on Energy Standing Committee of Officials, INTRODUCTORY NOTE, National Frameworks for Electricity Distribution Networks, Network Planning and Connection Arrangements – August 2007.
http://www.mce.gov.au/assets/documents/mceinternet/National_Frameworks_For_Electricity_Distributio_Networks_August_200720070822104551.pdf

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