Stop taxing the transition: Why fixed network charges get consumer energy resources all wrong

The recent RenewEconomy piece from Rob Passey and colleagues at CEEM is an important contribution to the debate on network pricing and consumer energy resources (CER), and deserves to be taken digested by policymakers and regulators. 

Their work lays out, with welcome clarity, how high fixed network charges cut directly across the capabilities of home batteries, dynamic pricing and CER more broadly. 

It is exactly the kind of grounded, system-aware analysis we need more of.

The AEMC’s pricing review starts from a real concern: under revenue-cap regulation, successful CER reduces grid consumption and so squeezes network revenues. But the proposed solution – loading more costs into fixed charges – treats CER as a problem to be contained rather than an asset to be orchestrated. 

It shores up incumbents, locks in legacy cost structures, and produces pricing that protects the network’s revenue position instead of forcing it to compete on the value it provides.

We know from both modelling and lived experience that home batteries, rooftop solar, flexible loads, and electric vehicles can deliver passive and active benefits even before you get to sophisticated orchestration. 

A battery that charges from midday solar and discharges into the early evening reduces peak flows through local networks and lowers wholesale demand at times when the system is traditionally under the most stress.

A heat pump or EV charger on a simple time-of-use or dynamic tariff can do the same. Turning a larger share of the bill into a fixed charge systematically weakens all of those behavioural signals.

That is a design flaw, not a side effect – and it undermines the future to shore up the past.

We have already shown, using real‑world market data, that batteries paired with solar can reliably cut costs and manage peaks across Australia’s grids, making it clear that pricing should amplify these dynamics rather than blunt them with high fixed charges.

From a WA and NT perspective, the problem is even more acute. We are already integrating some of the world’s largest hybrid solar-and-battery projects into relatively small and sometimes weak grids.

In these systems, millions of distributed devices are not a nuisance at the edge; they are an essential complement to utility-scale renewables, providing fast response, local peak reduction, resilience and, increasingly, export into evening peaks.

Policy that discourages CER uptake or flattens its value proposition is directly at odds with the needs of these transitioning systems.

This is where getting planning right matters as much as getting pricing right. 

As we wrote last month, Renewables Oriented Development (RODs) in urban and transport planning in urban and transport planning highlight how density, infrastructure, and well-designed precincts can be deliberately aligned with electrified transport and high renewable penetration.

Rather than treating CER as an after-thought, RODs embed flexible demand, storage and local generation into the shape of cities and corridors from the outset. That framing reinforces the CEEM argument: the network should be designed and priced to harness CER and ROD-style precincts, not to neutralise them.

There are better options than blunt fixed-charge increases. Network pricing can be made more cost-reflective without undermining equity. Carefully designed time-of-use and demand-based network charges, combined with targeted concessions for low-income and low-consumption households, preserve that balance. 

The signal becomes: “use the grid when it’s cheap and decarbonised, avoid adding to stress when it’s not,” rather than “pay the same regardless of how you use it.” 

And on the planning side, marrying CER-friendly tariffs with ROD-informed land-use and infrastructure decisions offers a pathway where networks, renewables and consumers all benefit.

Our recent work on how renewables and storage are steadily “passing gas” in both the NEM and WEM also underscores the point that the grid is now in a storage‑led transition, so locking in legacy network‑centric pricing risks slowing the very technologies that are delivering cheaper, more flexible power every half hour.

High fixed charges might patch a revenue concern in the short term, but they do so by undermining the very technologies and planning frameworks that make a high-renewables system work. 

Channel some Willie Nelson: the task now is not to fence CER in, but to design tariffs, markets, and urban forms that give a starry sky above and space to do the heavy lifting we so clearly need.

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