The Australian Energy Regulator (AER) has granted a regulatory sandboxing trial waiver to Ausgrid which will allow the electricity distribution business to test a new way of coordinating community scale batteries and solar installations within its Sydney and Central Coast networks.
The five-year ‘Community Power Network’ trial will operate under strict conditions to protect customers and competition, while helping the energy sector, including the AER, understand how this approach could improve outcomes for customers and the energy system.
The trial allows Ausgrid to own and operate 130MWh of battery assets in the Mascot-Botany area of Sydney and in the Charmhaven region of the NSW Central Coast, as well as install up to 70MW of solar generation assets as a supplier of last resort if third parties are unable to provide this service.
Ausgrid will offer incentives for customers to install additional rooftop solar in the trial areas and will then use community scale batteries to store energy within the local area, redistributing it at peak times and sharing the benefits back with consumers.
AER Board Member Lynne Gallagher said the decision to grant Ausgrid a trial waiver from ring-fencing rules, which exist to restrict the ability of monopoly network service providers to offer services in contestable markets, followed careful consideration of extensive stakeholder feedback.
She said the trial has the potential to offer insights into how coordination of distributed energy resources, such as community scale batteries, can smooth out grid operations, minimise future network costs and provide benefits for all consumers.
“We have a comprehensive set of conditions and expectations for this trial that protects consumers and which we consider will deliver valuable learnings to the sector around how to roll out and extract value from battery and solar assets,” Ms Gallagher said.
“We need to utilise more of our network for local generation, create more value from it and share it with consumers. This trial points to one way Ausgrid can use its network more efficiently.”
Ms Gallagher said key AER requirements in the decision included Ausgrid reporting comprehensively on outcomes and learnings to the market and publishing a plan detailing local network opportunities and constraints at not only the trial locations, but also at a third, separate location.
“This third location will allow service providers in the competitive market to explore opportunities to test and trial their own innovative energy solutions on an equal footing to the trial,” she said.
“Maximising the use of distributed energy resources such as community scale batteries is the next step in Australia’s energy transformation. Let’s learn what we can from this trial to inform the shape of future energy services.”
The AER’s decision does not enable Ausgrid to directly impose costs for the trial on its customers through a reassessment of its current regulated asset base.
Ausgrid submitted its waiver application to the AER’s regulatory sandboxing function, via the Energy Innovation Toolkit, and is the first ‘policy-led’ waiver the AER has granted since it established this new approach to sandboxing in February 2025.
