Unlocking CER Benefits Rule Change Draft Determination

On 29 February 2024, the Australian Energy Market Commission (AEMC) released a draft determination for a rule change designed to introduce provisions to better utilise consumer energy resources (CER) and newer energy technologies. This draft determination is in response to a rule change request submitted by the Australian Energy Market Operator (AEMO) in May 2022.

A draft determination provides an opportunity for interested stakeholders to review the rule change and participate in discussions and feedback sessions before the rule is published. This article provides a short overview of the proposed changes in the draft determination, which can be read in full on the AEMC website. 

Keep an eye on the EIT website in July for our explanation of the final determination. If you would like to be notified when new articles are published, subscribe to receive EIT updates.

The draft determination proposes rule changes to various metering arrangements to facilitate participation and settlement of newer technologies in the National Electricity Market (NEM). The proposed rule change introduces two new meter types and new provisions for additional settlement points behind a NEM connection point for small and large customers.

Type 8 and Type 9 meters

The first change introduces new kinds of energy meters. Modern smart meters, also known as Type 4 meters, are used for most new residential and business connections to the NEM. In some situations, like streetlights, street furniture, or pole-mounted EV chargers, it is not feasible to attach a typical Type 4 meter to the structure. 

The rule change introduces two new meters, Type 8 and Type 9. These meters will still need to fulfil requirements to allow for accurate billing and settlements within the NEM but will generally have a reduced set of technical specifications compared to Type 4 meters. 

This change will enable new products, like street-side electric vehicle chargers or smart streetlights, to use the in-built meters, minimising the infrastructure footprint and lowering meter installation and maintenance costs. As with all meters, Type 8 and Type 9 meters will require pattern approval by the National Measurement Institute.

Settlement connection points

Under the current rules, each connection point to the NEM is limited to one Financially Responsible Market Participant (FRMP). A FRMP is the Market Participant responsible for the settlement of any purchase of energy from the NEM or generation of energy to the NEM through that connection point. For small customers, this will be the retailer supplying the premise with energy. 

Connection points are metering installations with a physical connection to the distribution network . Each connection point has a unique National Metering Identifier (NMI) which is used to settle transactions in the NEM. The rule change introduces the settlement point, which is a ‘point’ within the customer’s electrical installation ‘behind’ the main connection point. The settlement point is given its own NMI so it may be separately identified by AEMO for transaction settlement.

Large customers

Sometimes, it can benefit a large customer (defined by the AEMC as a customer that has a yearly energy consumption in excess of 100MWh) to have more than one FRMP – for example, if they would like to buy energy from one Market Participant, but wish to use their generation assets to sell energy via a different Market Participant. 

The new rule change will allow large customers to organise additional settlement points behind a connection point, allowing more flexibility in choosing how to operate and utilise large customer CER. 

Large customers will have the option to use Type 9 meters at the connection point or additional settlement connection points instead of the standard Type 4 smart meter.  

Small customer settlement points

The draft rules propose a similar arrangement for small customers while retaining vital consumer protections. Establishing additional settlement points could allow households and small businesses more flexibility with how they use their CER assets, like rooftop solar PV , batteries and home electric vehicle chargers. 

It should be noted that the creation of an additional settlement point will not allow small customers to engage an additional FRMP. Instead, the existing FRMP (usually the retailer supplying the premises with energy) will be able to use the additional settlement point to optimise and coordinate flexible loads like CER. 

Under the proposed rule, small customers will be able to use Type 8 and Type 9 meters at the settlement point, as an alternative to the standard Type 4 smart meter.

If you would like to read more about the draft determination or wish to provide feedback to the AEMC about the proposed rule change, please visit the AEMC determination webpage for the full documentation. 

If you have any questions about the draft rule change and how it might apply to your project, contact us or submit an enquiry to our Innovation Enquiry Service . If you would like to read our full overview of the final determination later this year, make sure to subscribe to receive email updates.