Electric Vehicle Charging

Like any chargeable device, electric vehicles (EVs) (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) is likely to be the most common and convenient way to charge an EV most of the time.

There are several other charging models which present significant opportunities for innovation.  These models may be differentiated by the location of EV charging infrastructure (‘EV charge points’) on-street, at destinations (for example, at a supermarket, carpark or workplace) and en-route (for example, a service station or dedicated charging points along a highway). They may also be differentiated by the method and model of payment (for example, mobile apps, credit cards or dedicated cards, as well as subscription services, pay-as-you-go services or bundled offers).

The regulation of the operation of EV charging infrastructure and the supply of energy using public charge points are captured under the national energy frameworks governed by the National Electricity Law (NEL) and National Electricity Rules (NER), and the National Energy Retail Law (NERL) and the National Energy Retail Rules (NERR). Given these frameworks are technology-neutral, EVs are largely considered as another form of demand and another category of generation. The applicable national regulatory arrangements include those related to metering, connections to the network and sale of electricity to customers (among others). Where EV charging infrastructure is located at residential or business premises, and the EV charging service provider is supplying electricity to the occupier of the premises, the sale of electricity may be regulated by the NERL and NERR. However, the scope of the National Energy Customer Framework (NERL & NERR) is limited to the sale of energy (electricity and gas) to persons for premises. As a result, it is doubtful the sale of electricity from EV charging infrastructure located at a petrol station or shopping centre car park will be regulated by the NERL and NERR.

In addition to the national energy laws, 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.

The Use Cases on this website (‘Material’), are made available for use on the following basis:

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• Currency: The Material is based on publicly available information as at the date of its preparation. The Material is current as at 1 July 2024.
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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.

The National Energy Retail Law (NERL) states that any person who sells energy ‘to a person for premises’ is required to have a retailer authorisation or hold an exemption. Where EV charging infrastructure is located at residential or business premises, and the retailer, exempt seller or EV charging service provider is supplying electricity to the occupier of the premises, the sale of electricity may be regulated by the NERL and National Energy Retail Rules (NERR).

The Proponent may therefore require a retail authorisation (or could apply for an exemption) where the EV charge points are located on a business’ premises and electricity is supplied to the occupier of that premises i.e. the fleet operator.

Owning, operating or controlling an electricity distribution network requires registration from the Australian Energy Market Operator (AEMO) as a network service provider or an exemption from the Australian Energy Regulator (AER) under the National Electricity Law and National Electricity Rules. It is unlikely that this registration requirement will apply to the Proponent’s activities, as they will either be outside of the scope of this requirement or covered by an existing deemed exemption:

• The requirement for registration or exemption does not apply to an EV charge point 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 (AEMO) as a Customer. It will be a Market Customer given it will purchase electricity from the electricity wholesale market for its customers. 

As a Market Customer, the Proponent would be able to participate in the energy market on behalf of EV fleet owners, by buying energy in the wholesale electricity market. 

The Proponent intends to provide its service to EV fleet owners in the National Electricity Market (NEM) and the Northern Territory. This means that the Proponent may be subject to various jurisdictional licensing and exemption requirements related to the sale of energy, depending on the specific jurisdictional legislative definitions.  Jurisdictional electricity licensing legislation is not limited to the sale of energy ‘to a person for premises’ in the same way as the National Energy Retail Law (NERL) and retail electricity licences or exemptions will be required in several states and territories.³

• In Victoria, a licence from the Essential Services Commission (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 Utilities Commission recently undertook a review of the licensing regime and stated that it considers that EV charging services are likely to constitute selling electricity and require a retail licence or exemption. It also stated that some EV charging services may also require a network licence or exemption. The Utilities Commission's review recommended exempting EV charging operations from the requirement to hold a retail or network licence.⁴ Such an exemption must be approved by the Minister and the Northern Territory government has not yet responded to the review's recommendations. Accordingly, a retail licence or exemption and possibly a network licence or exemption is currently likely to be required for the Proponent to offer its services in the Northern Territory.
• In South Australia, a fixed term exemption from the requirement to hold a South Australian retail, generation 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 2024 (unless there is a need for ESCOSA or Minister to revoke the exemption on an earlier date).⁵
• In New South Wales, the Australian Capital Territory, 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, while in the Northern Territory the Utilities Commission has recommended such an exemption but it has not yet been implemented. In other states and territories, there are not currently any published guidance documents or existing exemptions that specifically apply to electric vehicle charging infrastructure.

Connection of an EV charge point to a local distribution network will require a connection agreement between the charge point owner/operator and the local distribution business. These agreements set out the obligations of the distribution business in respect of the provision of customer connection services to the connection point. They also set out various obligations on the customer (in this case, the EV charge point owner/operator) including in relation to information provision and safety. 

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.

The price that an EV charge point operator pays the local distributor can affect its ability to optimise and manage fleet load, including its ability to design simple and understandable EV customer incentives across the fleet and network. While the structure and level of network tariffs vary between different distribution networks, most are based on the customer’s maximum demand. For a fleet EV charging service, the maximum demand is likely to be very high when multiple vehicles are charging but very low at other times. In addition, most distributors’ standard network charges for large customers include lower prices at off-peak times. This presents opportunities for reward where EV fleets can be charged during off-peak periods. The distributor’s tariff structures and levels, including the time of day and form of its charges may need to be considered in the Proponent’s commercial analysis (e.g. customer pricing, customer demand).

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 (AER) in its annual tariff proposal, and is
• able to implement trial tariffs (which some distributors are presently exploring for EV charging)⁶, 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 or ancillary services in the National Electricity Market (NEM) wholesale market. However, opportunities to earn additional revenue are contingent on several factors, including the ability of the relevant party to integrate charging systems seamlessly with the grid eg. comply with relevant communication protocols, metering and response specification, cybersecurity requirements etc.  Further, the extent to which additional revenue can be generated will depend on how vehicle users - and, in this case study, fleets more generally - interact with the grid eg. vehicle usage patterns need to be able to align with opportunities to earn revenue from Frequency Control Ancillary Services (FCAS).⁷

Regarding metering and metering installation costs, the AEMC has proposed a number of changes to the National Electricity Rules (NER), including several which enable the in-built measurement capability in technology such as streetlights and EV chargers to be used instead of installing additional meters. These changes mean that, in the future, the Proponent may be able to significantly reduce metering and metering installation costs as a result of being able to use technology with in-built metrology. A draft determination and draft Rule for the Unlocking the benefits of CER through flexible trading rule change were published in February 2024. A final determination and final Rule are expected to be published in the second half of 2024, with new Rules to commence in 2026.⁸

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 (NEM) wide participation. In this scenario, the Proponent as the charge point operator would be subject to the relevant jurisdictions’ regulatory regimes, including licensing regimes.  

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.