AER releases annual assessment of Demand Management Innovation Allowance expenditures by Victorian electricity distributors for 2019

The Australian Energy Regulator (AER) today released its assessment of annual expenditure claims for 2019 by Victorian electricity distributors under the current Demand Management Innovation Allowance (DMIA) scheme.

The AER has approved $1.02 million of expenditure by these Distribution Network Service Providers (DNSPs) on seven demand management projects.

The DMIA scheme funds research and development projects explored by distributors that aim 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 for DNSPs. This reduces the reliance on more costly infrastructure and thereby reduces network charges.

Our 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, 52 per cent of expenditure relates to battery storage (residential or grid-scale), 32 per cent on residential load control, and 11 per cent on mini-grid trials.

The allowance is provided to each DNSP 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. Victorian DNSPs are currently in their 2016–2020 regulatory control period.

This assessment covers expenditure in 2019 for Victorian DNSPs. All of the expenditure claimed by these DNSPs met the DMIA criteria and has been approved.

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

Issued date: 
27 November 2020
AER reference: 
AC 161/20
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