State governments find themselves at pointy end of solar export proposal

State governments will be under pressure to lift their game on the regulation of networks, following the recent draft determination by the Australian Energy Market Commission (AEMC) to allow solar export tariffs.

The solar export tariff has been justified as a kind of ‘user pays’ approach to reducing ‘network congestion’. Network congestion manifests as problems with managing voltage or, at higher levels of solar exports, reverse power flow.

The AEMC is, in essence, proposing a national, pricing-based approach to voltage management which would be overlaid onto a state and territory regulatory approach. The Clean Energy Council urged the AEMC to consider consolidating voltage management governance, possibly by bringing it into the National Electricity Rules. All the AEMC had to say about that was: “The Commission considers that compliance with jurisdictional voltage standards is a matter for the relevant jurisdictional authorities” (p.78).

The ball is back in the states’ court. In theory, state and territory governments are expected to regulate voltage management on distribution networks. In practice, most jurisdictions have failed to do so.

A report commissioned by the Energy Security Board (ESB) [1]and undertaken by the University of New South Wales [2] found that “even in the absence of solar PV, there is a significant level of high voltage across all DNSPs in all NEM states” and “many sites experience higher voltages during the night when solar PV is not operational”.

The ESB notes that this “appears to point to a material level of technical non-compliance, but this may depend on how the data is viewed and how the respective standards are applied in each jurisdiction”.

Networks should first be required to meet their regulatory obligations regarding voltage management before introducing a user-pays approach. Twenty years after the standards changed, some distribution networks have still not caught up from the shift from the old 240V standard to the current 230V.

Ultimately, state energy ministers will be responsible for deciding whether to allow export charging in their states. All state energy ministers should be able to answer the following questions in the affirmative before they consider allowing the export charging proposal to proceed:

• Does my state have a framework for the regulation of voltage management by DNSPs?
• Has a regulator been given responsibility for the regulation of voltage management in my state?
• Has the regulator reported on voltage management by DNSPs in my state?
• Do the reports indicate that DNSPs are appropriately managing voltage as required by regulation?
• Are there avenues for dispute resolution (e.g. through the Energy Ombudsman) when customers and their network are in dispute?

If state and territory governments fail to adequately address these critical concerns before allowing solar export tariffs, consumers will suffer.

The network challenges that these reforms are designed to fix will not be resolved, and the considerable contribution of rooftop solar to state and territory renewable energy and emissions reduction targets will be significantly curtailed.

Darren Gladman is the Clean Energy Council’s director of distributed energy.

[1] Energy Security Board, May 2020, ESB cover note on the UNSW Voltage Report, available here

[2] Bruce, A., Heslop, S., Heywood, P., MacGill, I., Passey, R., Stringer, N. and Yidiz, B., May 2020, Voltage Analysis of the LV Distribution Network in the Australian National Electricity Market, available here