“Not business-as-usual:” Network mulls sun tax and “solar soaks” to cope with EVs and electric homes

Electricity distribution company AusNet is seeking to spend $3.5 billion to steer its network through a complex five years where abundant rooftop solar sends minimum demand to zero and beyond, and where electrification could set new records for peak demand.

In a draft proposal for the regulatory period from 2026-31, AusNet outlines the investments it plans to make as it accommodates a doubling in all-electric homes, exponential uptake of electric vehicles and the ongoing growth of rooftop solar and battery storage.

AusNet, which supplies electricity to 802,000 mostly regional customers in outer Melbourne and eastern and north-eastern Victoria says there are a range of complex issues that need to be considered leading up to its final submission to the Australian Energy Regulator.

“This is not a business-as-usual plan for AusNet, as this is not a business-as-usual time for the energy sector,” the draft proposal says.

“Some things, like network maintenance, we’ve been doing for a long time. Other things, like proactive investment in preparing the network for extreme weather events, or our ‘Flexible Exports’ program to enable more rooftop solar into the network, are new activities for AusNet.”

AusNet forecasts that the number of all-electric homes on its network will jump from 23 per cent in 2023 to 57 per cent by 2030, while the number of electric vehicles on the grid will go from 0.5 per cent to 12 per cent.

Maximum demand is expected to reach record highs each year after 2025, driven by customer growth and electrification of gas and transport, while increasing rooftop solar penetration – and more big wind and solar projects on the network – will drive declining minimum demand.

Minimum demand in the network is anticipated to fall below zero by 2024/25, AusNet says continuing a negative trend until a plateau around 2031, when electrification growth is expected to become stronger than rooftop solar growth.

Like Powercor, which submitted its own draft five-year plan earlier this month, AusNet also expects the highest peak in network level demand to shift from the summer months, where it lands now, to winter by 2027.

“Electrification of gas is the key contributor to the changing peak from summer to winter, as households switch to electric heating,” the report says.

“Approximately 7% of the winter peak is expected to come from the electrification of gas, while the electrification of transport is expected to contribute approximately 4.5% to maximum demand across the year.”

AusNet also expects customer numbers and electricity demand to reach record levels by 2031, driven by a surge in new types of business customers, including public EV charging stations, data centres, grid-scale batteries and battery/generation hybrid facilities.

As the table below shows, public EV charging is expected to chart 1250% growth between 2026 and 2031, as customer numbers grow from 180 at the start of the five-year period, to 2,460.

Rooftop solar growth is expected to continue to power along, with 39% of AusNet households expected to have rooftop solar by 2031, up from more than 29% at the moment.

Home battery uptake will also continue continue to grow, although at much lower penetration rates, from approximately 2% of AusNet households today, to just 7% in 2031.

AusNet says some of the $3.5 billion will be dedicated to unlocking more renewable energy exports and boosting the number of customers able to benefit from solar PV.

Much of this will be done through a combination of a roll-out of a Dynamic Voltage Management System (DVMS), local distribution substation upgrades and investment to enable flexible solar exports, which will be offered by AusnNet from 1 July in 2026.

As the draft proposal explains, flexible rooftop solar exports enable more export capacity than use of static limits, and do so at a relatively low cost, given the bulk of the necessary communications infrastructure has already been installed through the Emergency Backstop Mechanism.

Tariff changes will also be made, to help consumers get more out of their solar and other resources and, theoretically, to help the network to tame the solar duck in the middle of the day.

For AusNet, this will include the introduction of a low cost “solar soak” period in the residential time-of-use tariff from 11am to 4pm.

Interestingly, the draft proposal says the TOU tariff will be the “default opt-out tariff for all new customers, new solar customers and customers who upgrade their supply to three phase,” and will be “mandatory for EV customers with smart chargers.”

And unlike Powercor, which opted not to introduce a “sun tax” in its latest five-year plan, AusNet will offer a two-way tariff that will include an export tariff during the middle of the day and an export reward in the evening.

AusNet stresses, though, that this tariff is completely optional and most suitable for customers with flexible bi-directional technologies, like batteries and vehicle to grid in the future.

The proposal also includes a voluntary EV tariff and a hot water control tariff, both of which are designed to incentivise electricity consumption during the middle of the day when rooftop solar generation and exports are the highest.

“This investment will provide the funding to help us meet customer and community needs from a reliability, safety and affordability perspective,” AusNet executive general manager distribution, Andrew Linnie, said this week.

“It’s important that we balance investing in the network for reliability and resilience, with keeping energy prices as affordable as possible. We would like feedback from our customers on whether we have struck the right balance.”