Electric Vehicle Charging
This hypothetical case study will be particularly relevant to charge point operators, charge point infrastructure providers, local governments, electric vehicle (EV) users, fleet operators, trade associations and other innovators looking for opportunities in this space.
Like any chargeable device, electric vehicles (including plug-in hybrid vehicles) require an EV charger to keep the battery full. The simplest and most common EV charging system delivers electricity to the vehicle by drawing electricity from an outlet connected to the grid.
Charging an EV at a user’s premises (that is, behind-the-meter
There are several other charging models which present significant opportunities for innovation. These models may be differentiated by the location of EV charging infrastructure
The regulation of the operation of EV charging infrastructure
In addition to the national energy frameworks, jurisdictional regulatory requirements may also apply. Under some state and territory retail electricity licensing requirements, a licence or exemption is required for EV charging services (this is discussed in the section below on authorisation, licensing and registration requirements).
A network licence, authorisation or exemption for the operation of the EV charging infrastructure may also be required.
To help identify and unpack some of the key regulatory issues that an EV charging service provider may encounter when navigating the national, as well as relevant state or territory based, energy regulations, this case study will explore a scenario where the Proponent establishes an EV fleet charging service for businesses with a growing EV fleet. The service will be offered across the National Electricity Market
For this scenario, the following information is provided:
- a high-level overview of a hypothetical project including the project goals, project facts and ownership and service delivery models
- relevant authorisation, registration and licence requirements applicable to the hypothetical business model
- key energy specific regulatory obligations applicable to the hypothetical business model, and
- potential challenges the hypothetical Proponent may need to navigate when developing this business model.
The Use Cases on this website (‘Material’), are made available for use on the following basis:
- Purpose: The Material is provided for general information only. It is designed to assist you to gain a basic understanding of the subject matter and is not intended to be comprehensive. You are not permitted to commercialise it or any information contained in it. The Material is not and should not be regarded as legal, business or other professional advice. It should not be relied on and is not a substitute for obtaining independent legal, business or other professional advice relevant to your particular circumstances.
- Currency: The Material is based on publicly available information as at the date of its preparation. The Material is current as at 3 December 2021.
- Scope: The Material only covers energy market regulatory obligations that are administered by the Australian Energy Regulator (AER), the Australian Energy Market Operator or the relevant state or territory energy regulator. It does not cover other obligations that may apply, such as safety obligations, general consumer law obligations or obligations under the financial services regulatory framework. It also does not cover associated technical matters such as compliance with Australian standards or connection requirements.
- No reliance or warranty: The Material may be subsequently amended or updated. While reasonable care is taken in the preparation of the Material, the AER makes no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the Material, or as to its suitability for any purpose. In all cases, anyone proposing to rely on or use the Material should independently verify its accuracy, completeness, reliability and suitability for their own purposes, and obtain independent and specific advice from appropriate experts.
- Limitation of liability: To the maximum extent permitted by law, the AER and its officers, employees, consultants, contractors, and other contributors to the Material (or their respective associated companies, businesses, partners, directors, officers or employees) are not liable for any errors, omissions, defects or misrepresentations in the Material, or for any loss or damage suffered by persons who use or rely on such information (including by reason of negligent act, omission, misstatement or otherwise). If any law prohibits the exclusion of such liability, the AER’s liability is limited, at the AER’s option, to the re-supply of the information, provided that this limitation is permitted by law and is fair and reasonable.
Scenario: EV Fleet Charging Service
The number of EVs in Australia is expected to grow as cheaper models arrive and more EV charging infrastructure
In this context, an innovative EV technology business (the Proponent) plans to offer a new EV fleet charging service to businesses seeking to take advantage of various government incentives to transition their existing vehicle fleets to EV fleets. The Proponent already offers a web-based analytics service to help businesses to better manage and track their business vehicles. Recognising the significant growth opportunity presented by electric vehicles in Australia, the Proponent intends to leverage its existing technology and platform to enable EV fleet owners to take advantage of the value that EVs can provide.
The Proponent intends to operate a fully integrated business model which, in addition to its traditional fleet management service, includes installation and operation of EV charge points at a business’ premise and the sale of electricity from the charge points to the fleet owner.
In the future as its customer base expands, the Proponent may also offer network support services to the local distribution business or offer wholesale demand response services
By choosing to become both an EV charge point
The EV fleet charging service aims to:
- help fleet owners reduce the costs of operating their vehicles
- accelerate the uptake of EVs in Australia, and
- contribute to emissions reduction goals.
|EV Charging Service|
|Location||NEM and Northern Territory|
|Proponent||An innovative EV technology business|
Ownership and operation model
The Proponent would own and operate the technology supporting the EV fleet management system and the EV charge points and associated infrastructure.
The Proponent will provide a fully integrated service to its customers (the fleet owners) which will include:
- web based fleet management service
- installation and operation of EV charge points on site at a business’ premises, and
- the sale of electricity from the charge point to the fleet owner, including metering, payment and billing services.
Overview of authorisation, registration and licensing requirements
The National Energy Retail Law
The Proponent may therefore require a retail authorisation
Owning, operating or controlling an electricity distribution network
- The requirement for registration or exemption does not apply to an EV charge point
EV charge points are equipment that connects an electric vehicle (EV) to a source of electricity so that it can recharge. This does not include chargers connected to a general power outlet.that is directly connected to the local distribution network.1
- If the EV charge point is connected to an existing exempt network rather than the local distribution network, a deemed network exemption applies. This exemption covers ‘Electric vehicle charging stations within a private network (e.g. a privately owned charging station located in a public area, hotel, shopping centre, university, etc.)’.2
The Proponent would be required to register with the Australian Energy Market Operator
As a Market Customer, the Proponent would be able to participate in the energy market on behalf of EV fleet owners, that is - buying and selling energy in the wholesale electricity market
The Proponent intends to provide its service to EV fleet owners in the National Electricity Market
- In Victoria, a licence from the Essential Services Commission
The Essential Services Commission (ESC) is an independent regulator that promotes the long-term interests of Victorian consumers with respect to the price, quality and reliability of essential services. In Victoria, the ESC has responsibility for licensing and licence exemptions in the electricity and gas markets. The ESC licenses various activities including electricity and gas retail and distribution, electricity transmission, and electricity generation. The ESC also makes and enforces customer protections and other rules predominately in the electricity and gas retail and distribution markets in Victoria, where the National Energy Retail Law (NERL) and the National Energy Retail Rules (NERR) don't apply.(ESC) is required for the sale or supply of electricity, and this requirement is likely to apply to EVs. Alternatively, an exemption can be granted by the Minister through an Order in Council.
- In the Northern Territory, a retail licence or exemption from the Utilities Commission of the Northern Territory is required for selling electricity. Exemptions can be granted by the Utilities Commission with the approval of the Minister. The relevant legal instruments do not expressly address EVs, but a retail licence or exemption may be required. The Utilities Commission is commencing a review of the licencing regime in 2022 that will consider the application of the licence regime to EVs, among other issues.
- In South Australia, a fixed term exemption from the requirement to hold a SA retail and distribution licence applies to operators of EV charging stations. This means that EV operators who do not already hold a licence will not need to obtain and maintain a licence from the Essential Services Commission of South Australia (ESCOSA). This exemption will remain in effect until 30 November 2023 (unless there is a need for ESCOSA or Minister to revoke the exemption on an earlier date).4
- In NSW, the ACT, Tasmania and Queensland, there are no applicable state retail electricity licensing obligations.
The Proponent will also need to consider whether installing and operating EV charge points may require it to obtain a network licence or exemption from the jurisdictional regulator in any of the states or territories where it operates. The Proponent should discuss this issue directly with the relevant jurisdictional regulators. Whether a licence or exemption may be needed is likely to depend on the circumstances. As noted above, in South Australia, ESCOSA has issued an exemption from the requirement for a distribution licence for operators of EV charging stations. In other states and territories, there are not currently any published guidance documents or existing exemptions that specifically apply to electric vehicle charging infrastructure, but several governments or regulators are currently undertaking reviews that may clarify this issue in future.
Description of key energy specific regulatory obligations
The table below sets out the key regulatory obligations that may be applicable to the Proponent as a result of the various registrations, authorisations and jurisdictional licenses that apply.
|Requirement||Key regulatory obligations|
Authorisations and exemptions
Retailer authorisation (or individual exemption) may be required
An authorised retailer
Authorised retailers have various obligations in respect of the sale and supply of electricity to small customers, relating to:
Network exemption (deemed) (applies if EV charge point
Exempt parties must comply with the relevant general requirements set out in the AER’s Network Exemption Guidelines. For Electric Vehicle charge points connected to an exempt network, this includes requirements relating to:
Registrations and exemptions
Registration as a Customer required
Registered Customers must comply with the relevant provisions in the National Electricity Law, National Electricity Rules and AEMO Procedures. The relevant provisions include those related to participation in the energy and ancillary service markets, network connections and metering.
Licences and exemptions
Victoria - Retail electricity licence may be required
Licence holders must comply with the requirements of the Electricity Industry Act, the terms of their licence and the relevant ESC Codes of Practice and Guidelines including the Energy Retail Code of Practice. Under the ESC Codes of Practice, licenced retailers have various obligations in relation to the sale of energy to customers, in particular where they sell energy to small customers, including in relation to customer contracts, billing disputes, payment difficulties, contents of bills, the provision of information to customers, marketing and dispute resolution.
South Australia – Retail electricity exemption applies (for sale of electricity to customers who are not connected to the NEM)
An exemption from the requirement for an electricity retail licence applies to EV charging operators in South Australia. Exemption holders must comply with the conditions of the exemption, which includes complying with all applicable laws, providing information to ESCOSA on request and maintaining adequate insurance.
Northern Territory – Retail electricity licence or exemption may be required
Licensed retailers must comply with the Electricity Reform Act, their licence terms and Codes and Guidelines made by the Utilities Commission including the Electricity Retail Supply Code and Electricity Industry Performance Code. The Electricity Retail Supply Code includes obligations related to customer transfers, metering, dispute resolution, life support, and coordination and billing between retailers, network providers and generators. Exemption holders must comply with the conditions of the exemption.
Network licences or exemptions may be required in some states or territories
An exemption from the requirement for a distribution licence applies to EV charging operators in South Australia and operators must comply with the exemption conditions, as discussed above. In other states and territories, the proponent should seek guidance from the relevant state or territory regulator in relation to whether a network licence or exemption may be needed and, if so, what conditions would apply.
Other energy specific regulatory obligations
In addition to the regulatory obligations that flow from the various registration, authorisation and jurisdictional licensing requirements, the Proponent will also need to be aware of other energy specific regulatory obligations related to the national and (relevant) jurisdictional energy frameworks. For example:
Connection of an EV charge point
Decisions regarding the location and design of EV charging points must be undertaken having regard to relevant national and jurisdictional safety legislation and standards. These are likely to include standards regarding electrical safety, work health and safety, communications, wiring etc.
Potential challenges for this hypothetical proponent and their business model
The above discussion frames the breadth of regulatory considerations that the Proponent could face under this case study. This raises a range of challenges they may need to consider when developing their business model. While these challenges depend on the arrangements used to buy and sell electricity, some threshold questions the Proponent may need to consider are set out below.
The price that an EV charge point
In addition, while there is no regulatory mechanism for exemptions from network tariffs for EV charging, in limited circumstances the local distributor is:
- permitted to develop a bespoke tariff offering or ‘individually calculated tariff’ that is approved by the Australian Energy Regulator
The Australian Energy Regulator (AER) regulates electricity networks and covered gas pipelines in all jurisdictions except Western Australia. The AER sets the amount of revenue that network businesses can recover from customers for using these networks. The AER also enforces the laws for the National Electricity Market (NEM) and spot gas markets in southern and eastern Australia, as well as monitoring and reporting on the conduct of market participants and the effectiveness of competition.(AER) in its annual tariff proposal, and is
- able to implement trial tariffs (which some distributors are presently exploring for EV charging)5, which have a maximum period of up to 5 years before the distributor would need to seek AER approval.
Additional value may be gained by enabling EVs to participate in energy and services markets. For example, there may be opportunities to offer network support services to the local distribution business or offer wholesale demand response services
For a small innovative business seeking to enter the energy supply market, a multi-jurisdictional business model could prove challenging given the number of jurisdictional regulatory regimes that would need to be understood and ultimately complied with. Depending on the nature of the activities and services a Proponent wishes to provide, a model which utilises partnerships with other players may be one way to minimise the regulatory compliance risk and cost associated with National Electricity Market
Enabling EVs to participate in energy and services markets provides their owners with additional revenue streams. Greater market participation and diversity lowers costs to all energy consumers by improving network utilisation through market signals and incentives.
Ongoing reforms and policy developments
1See the AER’s Electricity Network Service Provider
2See the AER’s classes of network exemptions at https://www.aer.gov.au/networks-pipelines/network-exemptions/classes-of….
3If the Proponent also operates in Western Australia, a retail licence or exemption may be required from the Economic Regulation Authority. We have not addressed WA regulatory obligations in this case study as WA is outside of the scope of this website.
4A copy of these exemptions can be accessed at: https://www.escosa.sa.gov.au/projects-and-publications/projects/electri…
5For further information on trial tariffs see: https://www.aer.gov.au/networks-pipelines/network-tariff-reform/tariff-…
Hypothetical case study mapping the coordination of wind generation, residential solar PV, a battery energy storage system, and information and communication systems, to create a 100% renewable energy supply servicing a coastal community with a population of 1,500, including infrastructure to enable EV charging stations. Particularly relevant for: microgrid operators, local governments, community groups, universities, embedded network operators, developers, strata owners’ corporations, owners of commercial precincts or shopping centres