AER releases annual assessment of Demand Management Innovation Allowance expenditures by electricity distributors for 2017–18

The Australian Energy Regulator (AER) today released its assessment of the annual expenditure claims for 2017–18 made by electricity distributors under the current Demand Management Innovation Allowance (DMIA). The AER has approved $6.1 million of expenditure by Distribution Network Service Providers (DNSPs) on 38 demand management projects.

The DMIA scheme funds research and development projects to be tried by distributors to shift or reduce customer demand in order to avoid network augmentation. The projects may target a reduction in broad-based demand or peak demand. Innovative programs are encouraged. Where projects are successful, they are able to be incorporated into business as usual management practices for DNSPs. This enables a reduction on the reliance of more costly infrastructure and thereby reduces network charges.

The 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, 30 per cent of expenditure relates to residential battery storage, 15 per cent on house and air conditioning load control, and 15 per cent on micro-grid trials.

The allowance is provided to each distributor in the form of a fixed allowance for each regulatory period. If distributors do not spend their DMIA 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.

This assessment covers expenditure in 2017–18 for non-Victorian distributors and 2018 for Victorian distributors (who report on a calendar year basis). All of the expenditure claimed by the distributors met the DMIA criteria and has been approved.

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

Issued date: 
11 September 2019
AER reference: 
AC 125/19
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