More solar for everyone: S.A. network operator backs consumer-focused rule changes

South Australia Power Networks has thrown its weight behind calls to ensure that the cost of supporting increased uptake of rooftop solar is fairly allocated between all customers, and in a way that is revenue neutral for distribution networks.

In a statement on Thursday, SAPN released its own version of a rule change proposal that broadly supports the push from Total Environment Centre, Australian Council of Social Service and St Vincent De Paul for a consumer-focused review of electricity rules to ensure they support the continued growth of rooftop solar and other distributed energy resources (DER).

“We already have nearly 1,500MW of solar generation on customers’ rooftops in SA and demand is continuing,” said Mark Vincent, SAPN’s general manager of strategy and transformation. “We want to accommodate even more solar on our network and provide services that help maximise the benefit of customers’ investment in DER for the community.”

The SAPN submission’s solidarity with the TEC/ACOSS proposal – which is discussed in-depth on RenewEconomy here, and in the latest Energy Insiders podcast here, and in Mark Byrne’s own words, here – offers a good sign, coming from the distribution network service provider with the highest concentration of rooftop solar on the National Electricity Market.

As RenewEconomy editor Giles Parkinson noted on Thursday, “rooftop solar exports have been an issue ever since the energy industry ignored the bleeding obvious and under-estimated the numbers of households that would flock to the new technology, and failed to prepare their infrastructure, their business models, and their mindset.”

Attempts to address the “problem” have come mostly from industry players and regulators, and have ranged from moves to reject some installations, to limit system sizes and exports to the grid, to charging solar households an export fee.

And most recently, the Australian Energy Market Operator has sought to be able to turn off solar exports on the rare occasions it threatens to overwhelm the AEMO’s ability to manage the grid.

The TEC/ACOSS proposal is remarkable in that it doesn’t come from the regulators or the incumbent utilities, but from progressive consumer groups.

In its own statement on Thursday, SAPN said it supported a rule change that would give customers the right to export energy to the grid from rooftop solar and other DER, that would encourage networks to invest efficiently to support continued solar uptake, and that would fairly distribute the costs for this uptake between customers and in a way that was revenue neutral for DNSPs.

“We believe the rules need to be relevant to a 21st Century system that increasingly is about DER,” said Vincent. “After more than 10 years of customer investment in DER, particularly rooftop solar, the rules need to catch up and facilitate future investment in solar and emerging technology such as batteries and electric vehicles.”

Vincent said the issue needed addressing as a matter of urgency, with many electricity networks reaching their capacity to support distributed solar and new investments required to support additional DER uptake.

This is particularly the case in South Australia, which has already surpassed 50 per cent renewables on its grid and is headed for a net-100% renewables energy supply by 2030 – and probably earlier.

“We need clear rules that ensure we make appropriate investments in the network that support the choices being made by customers, including those investing in solar, batteries and electric vehicles in the future,” he said.

“Customers would be surprised to know that they don’t have a right to export energy from their systems under the current national electricity market rules.

“Equally, network businesses like us have no clear guidance on the extent to which we should invest to support solar PV and other DER. We also think it’s important for the rules to consider, and provide guidance, as to who should pay for any required investment.”

SAPN proposes introducing a “very modest increase” in network charges for new solar and other DER customers that could be offset by reductions in consumption charges and, potentially, rewards for exporting energy at certain times.

It says this would not change revenue for DNSPs like SAPN but would instead adjust how the networks recover Regulator approved revenue from customers through their annual tariffs.

“If the pricing aspect of the proposal is approved, we would expect to see a modest increase in network charges for exports by new solar and other DER customers, although this would be offset by reductions in consumption charges and potentially rewards …for example (for) discharging energy stored in batteries at times of peak demand,” Vincent said.

SAPN said it believed continued customer DER take-up could be supported efficiently with minimal changes to national electricity rules, “by simply giving ‘export services’ the same status in the rules as ‘consumption services.’”

On this basis, the DNSP says, networks would have an obligation to meet demand for export services, consistent with customers’ willingness to pay, in exactly the same way as they were obliged to meet demand for consumption.

“We are proactively thinking about how the rules can best facilitate networks to continue to provide services to customers in the most efficient way possible,” Vincent said.

“There is strong stakeholder support for the proposal, including from some in the solar sector and representatives of vulnerable customers. We also recognise some stakeholders are opposed to any change, but we think it is appropriate and time to weigh up the issues and make a decision that gives clarity for everyone.

“In submitting our proposal into the AEMC process, we seek to complement the work and overall objectives of these other rule change proponents by providing our perspectives and experiences as the distribution network at the forefront of Australia’s energy transition,” Vincent said.