AER releases annual assessment of Demand Management Innovation Allowance (DMIA) expenditures by Victorian electricity distributors for 2020

The Australian Energy Regulator (AER) today released its assessment of the annual expenditure claims for 2020 made by AusNet Services, Jemena, CitiPower, Powercor and United Energy under the current Demand Management Innovation Allowance (DMIA) scheme.

The AER has approved $4.5 million of expenditure by these Distribution Network Service Providers on 14 demand management projects.

The DMIA scheme funds research and development projects undertaken by distributors to reduce or shift customer demand in order to avoid or defer network augmentation.

The projects may target a reduction in peak demand or broad-based demand. Where projects are successful, they are able to be incorporated into business as usual management practices. This reduces the reliance on more costly infrastructure and thereby reduces network charges.

The AER’s assessment provides insights into the total value of expenditure approved and the type of projects the scheme has delivered. The projects varied in both their nature and scale. In the most recent period, 56 per cent of expenditure relates to voltage management, 25 per cent on customer demand response and 11 per cent on grid battery storage.

The allowance is provided to each distributor in the form of a fixed allowance for each regulatory period. If distributors do not spend their allowance in full, the underspent amount is deducted from the expenditure allowance for the next regulatory period. If the allowance is overspent, the distributor must meet the higher expenditure itself and cannot recover this from its customers.

Due to the extension of the Victorian 2016–20 regulatory period by six months, the AER will calculate the distributors' underspend or overspend after 30 June 2021.

For more detailed information about the projects, please refer to each distributor's DMIA report.

Issued date: 
30 September 2021
AER reference: 
AC 156/21
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