Assessing distributed energy resources integration expenditure guidance note

On 6 July 2021 the AER published its draft DER integration expenditure guidance note and explanatory statement. The draft guidance note considers the recommendations made by the CSIRO and CutlerMerz in its 2020 VaDER report. It aims to ensure that electricity distribution networks prepare business cases for capital expenditure to accommodate DER in a consistent and transparent manner, so that customers only pay for network investments that deliver them benefits.

Consultation

We invited submissions from interested stakeholders on our draft Distributed Energy Resources (DER) Integration Expenditure guidance note by Tuesday, 31 August 2021. Submissions have now been published. 

We also hosted an online forum for interested stakeholders on Thursday, 5 August 2021. The presentations provided at the online forum have now been published. 

Background

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 CutlerMerz 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.

As per the recommendations from the VaDER study, the AER released draft guidance note for DER integration expenditure on 6 July 2021 inviting submissions. We received 16 submissions on the draft.

On 30 June 2022, the AER released the final guidance note for DER integration expenditure.