The AER has today released decisions to grant ring-fencing waivers to Ergon Energy and Energex, from clause 3.1 of the Ring-fencing guideline (Electricity distribution). These waivers will allow Ergon Energy and Energex to lease capacity of 30 battery energy storage system units to third parties (24 for Ergon Energy and 6 for Energex). Both waivers are valid until 31 December 2042.
We have assessed the waiver applications under our streamlined assessment process and consider that they satisfy the evidence required to grant these waivers. The duration of the waivers is also considered appropriate as it aligns with the economic life of the battery energy storage systems.
Our decision to grant the waiver applications aligns with the National Electricity Objectives 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 these waivers, Energex and Ergon Energy would otherwise be prevented from delivering broader system value, limiting the overall benefit from the battery units.
The waivers are granted with conditions that requires Ergon Energy and Energex 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.