On 2 May 2025, Ergon Energy submitted a waiver application under clause 5.2 of the Ring-fencing guideline (Electricity distribution) ('the guideline').
The AER decided to grant Ergon Energy a waiver from clause 3.1 of the guideline. The waiver will allow Ergon Energy to lease capacity associated with six battery energy storage system units to third parties. The waiver is valid until 30 June 2040.
We have assessed the waiver application, including feedback received through consultation, and consider that they satisfy the evidence required to grant the waiver. The duration of the waiver is also considered appropriate as it aligns with the economic life of the battery energy storage systems.
Our decision to grant the waiver application aligns with the National Electricity Objective as the battery units can provide operational support to networks to ensure reliable, affordable and safe functioning of power systems. The AER considers that battery units can play an important role in reducing energy costs for consumers. Without the waiver, Ergon Energy would otherwise be prevented from delivering broader system value by leasing surplus battery capacity, limiting the overall benefit from the battery units.
The waiver is granted with conditions that requires Ergon Energy to report on usage of battery units, contractual information, storage tariffs and battery connection timeframes. These additional conditions will help mitigate potential discriminatory risks identified by ensuring greater transparency around storage tariffs and connection times.