Expert committee to assist federal oversight of home solar, batteries and EVs, with minister having final say

The latest meeting of national energy ministers has detailed how the federal government will set and enforce standards for the rapidly expanding household market for solar panels, storage and other consumer energy resources.

As foreshadowed by Renew Economy, the Albanese government will develop technical requirements for consumer energy resources within the Department of Climate Change, Energy, the Environment and Water (DCCEEW). These will sit within a Technical Requirements Office (TRO).

It will also set up a Consumer Energy National Technical Regulator (CENTR), hosted by the Clean Energy Regulator, to manage compliance and conformance with the new CER Technical Code developed by DCCEEW.

The code will set common technical rules for consumer energy resources, such as inverters for batteries and rooftop PV systems and electric vehicle (EV) supply equipment. 

“The code will support a more reliable energy system and give consumers more options in the future,” according to the CENTR framework published on the department website after it won endorsement at Friday’s Energy and Climate Ministerial Council meeting.

“It will ensure products can connect to and work with the electricity grid. It will also help different products and energy services work together,” it said.

The department also published more details of its framework here. To bolster its technological capability, DCCEEW will create a seven-person technical requirements advisory committee – generating yet another acronym, TRAC.

“TRAC fills a critical capability gap by supplying independent, specialist technical expertise not held within government or CENTR, ensuring that CER technical requirements remain credible, evidence-based, and aligned with industry evolution,” the framework stated.

Having that committee would also obviate the need for DCCEEW to hire extra full-time expertise, one industry observer said.

The department held a couple of stakeholder meetings on Thursday and Friday in a bid to assuage concerns from industry advocates who had called for a more independent arrangement. Having the code developed within the department, for instance, may reduce transparency and limit consultation, they said.

Similarly, a change of government could leave too much clout in the hands of a minister less supportive of the industry’s development.

“Good policy is not just about choosing an option,” said Stephanie Bashir, founder and chief executive of Nexa Advisory. “It is about demonstrating that the option has been properly tested, transparently developed and informed by those who will be required to implement it.”

“The options, recommendations and final decision should have been subject to a transparent consultation process with industry,” Bashir said.

“Consumers and industry more broadly need to know how government will ensure the necessary technical expertise, independence and accountability is enforced. “

The new framework details the critical role the federal energy minister will play in determining what advice gets implemented, whether that advice comes from DCCEEW or the new committee.

“The Minister will be the decision-maker in relation to changes and updates to the Forward Work Plan and Technical Code,” the framework paper states. “TRAC will have a formal advisory pathway to the Minister, supported by published outputs as well as formal and informal advisory pathways to the TRO.”

Similarly, “[t]he Minister, or their delegate, will be the accountable decision-maker for Technical Code and Forward Work Plan updates.” That code will be updated every two years “with Ministerial approval”.

DCCEEW officials said the new arrangements were informed by previous bureaucratic rejigs, such as the changes that followed the Chubb Review of Australian Carbon Credit Units.

Nexa’s Bashir, though, said the process in giving the minister and the energy department control over technical standards was setting “a dangerous precedent”.

“We are now seeing a pattern of major energy policy and regulatory decisions being made without the transparency, rigorous process and meaningful consultation with industry that should underpin decisions affecting consumers and the energy system,” she said.

“We have seen advice supporting Distribution Network Service Providers (DNSPs) taking on the role of Distribution System Operators – potentially leaving energy consumers to foot the bill for 13 different IT systems and processes when a more coordinated approach could avoid unnecessary duplication,” Bashir said.

“We have seen the decision to allow EV-charging costs to be recovered through DNSP charges, despite network charges already being the largest component of many electricity bills,” she said. “Consumers deserve better than decisions made behind closed doors and presented as a fait accompli.”

As it happens, the choice of DCCEEW to set the technical code was not among the four options canvassed by the Australian Energy Market Commission in its 2023 final report on consumer energy resources.

The AEMC’s third option – to expand the role of the Clean Energy Regulator under the Commonwealth’s Renewable Energy (Electricity) Act 2000, the CER setting and ensuring compliance on a nationally consistent basis – appeared to be the likely outcome, given Bowen’s speech in March.

“The benefit of this approach would be the ability to leverage the Clean Energy Regulator’s existing regulatory relationships with [original equipment managers] and installers, neither of which are regulated under the [National Electricity Law],” the AEMC said.

“The limitation with this approach is the uncertainty over the Clean Energy Regulator’s longer-term role in the regulation of small-scale generation units,” the report noted. “It is also unclear if the Clean Energy Regulator is sufficiently resourced and experienced to enforce CER technical standards in pursuit of power sector objectives.”

In the end, though, ECMC did not endorse the CER as an end-to-end regulator of consumer energy resources – much to the disappointment of some industry advocates. Instead, it excised the important standard-setting powers, giving them to DCCEEW – and the federal minister – instead.

In addition to determining the arrangements for setting technical standards for consumer resources, the ECMC meeting dealt with other energy issues, including plug-in solar, fuel security and data centres.

“Ministers (except Queensland) agreed to release a consultation package on the core reforms of the National Electricity Market Wholesale Market Settings Review,” the communique said.

“The package includes draft legislation, initial draft rules, and a consultation paper outlining the proposed design of the Electricity Services Entry Mechanism (ESEM), the Market Making Obligation (MMO), and powers to improve the visibility and participation of price responsive resources.“

Among those absent from the session were: NT energy minister, Gerard Maley, his WA counterpart Amber-Jade Sanderson, Queenland’s David Janetzki – who was busy dealing with a credit ratings downgrade for his state on Friday – and Victoria’s new energy minister, Jaclyn Symes.

Ministers also “acknowledged the contributions of former Victorian Minister D’Ambrosio during her long-standing membership of the council.” D’Ambrosio stepped down from her role as energy minister in July, and reflected on her time to Renew Economy here and here. 

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