Assessing Distributed Energy Resources Integration Expenditure

Date initiated: 
19 November 2019
AER General Inquiries


The AER sought views from stakeholders to develop guidance that can be provided to distribution network service providers (DNSPs). The consultation paper Assessing Distributed Energy Resources (DER) Integration Expenditure was released on 19 November 2019 and considers how the AER may assess DNSPs’ proposed expenditure to manage the increasing challenge of accommodating DER on their networks. In particular, the paper considered:

  • the current and predicted effects DER is having on networks
  • the AER’s current approach to assessing DER integration expenditure
  • whether our current set of expenditure assessment tools are fit-for-purpose both now and into the future.

DER integration is an emerging area of expenditure. This consultation is part of our continuous review of our regulatory toolkit for assessing electricity determinations and will support consumers to pay no more than necessary for the safe and reliable distribution of electricity. More details on the techniques we currently apply to assess a distributor’s expenditure assessment proposals is provided in our Expenditure forecast assessment guideline.

We invited written submissions to the consultation paper between 19 November 2019 and 20 January 2020. In response to these submissions, the AER commissioned the CSIRO and Cutler Merz to conduct a study into potential methodologies for determining the valuing of DER (VaDER).

Stakeholders were invited to attend two public forums in mid-September 2020, which provided an overview of the draft VaDER report and an opportunity to ask questions to help inform their submissions. We received a series of submissions from a range of stakeholders, including DNSPs, consumer group representatives, industry organisations and consultants.

We received the final VaDER report from the CSIRO and Cutler Merz in early November 2020. We published the final report, an accompanying FAQ document and stakeholder submissions later that month. The findings and recommendations of the final VaDER report will be reviewed and considered as part of the AER’s DER integration expenditure guideline, which is expected to be completed in 2021.