Glossary

Services that are essential to the management of power system security, facilitate orderly trading in electricity and ensure that electricity supplies are of acceptable quality. These services are managed by the Australian Energy Market Operator (AEMO) to maintain standards for frequency, voltage, network loading, and system restart processes.

The AEMC is an independent statutory body that works for Australia's future productivity and living standards by contributing to a decarbonising, affordable and reliable energy system for consumers. The AEMC makes and amends the National Electricity Rules (NER), the National Gas Rules (NGR), and the National Energy Retail Rules (NERR), and manages the rule change process. The AEMC does this in accordance with the national energy objectives, the central focus of which is the long-term interests of consumers. They also provide market development advice to governments.

The Australian Energy Market Operator (AEMO)  manages electricity and gas systems and markets across Australia, helping to ensure Australians have access to affordable, secure and reliable energy. Ownership of AEMO was – and still is – shared between government and industry, with members representing federal and state governments, as well as generation and production, distribution, retail and resources businesses across Australia. AEMO has always operated on a user-pays cost-recovery basis, and it recovers all operating costs through fees paid by industry participants.

The AER regulates wholesale and retail energy markets, and energy networks, under national energy legislation and rules. AER’s functions mostly relate to energy markets in eastern and southern Australia. The AER regulates:

• Wholesale energy markets - the AER monitors, investigates and enforces compliance with national energy legislation and rules and monitors participant bidding and rebidding, market dispatch and prices, network constraints and outages, demand forecasts and forecasts of production and capacity.
• Energy networks regulation - the AER regulates electricity networks and natural gas pipelines by setting the maximum amount of revenue these energy network businesses can earn.
• Retail energy market regulation - the AER regulates retail electricity and gas markets in jurisdictions that have commenced the National Energy Retail Law (NERL). 

The AER does not set retail energy prices, but it provides a price comparison website, Energy Made Easy, to help customers find the best energy offers for their needs.

ARENA supports the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers.

Since 2012, ARENA has supported 612 projects with $1.81 billion in grant funding, unlocking a total investment of almost $7.9 billion in Australia’s renewable energy industry.

ARENA’s expertise, deep understanding of the renewable energy sector and willingness to fund innovative and ground-breaking projects mean it provides a pathway to commercialisation for many new technologies and businesses that would otherwise struggle to get off the ground or be potentially lost to overseas markets.

Under the National Energy Retail Law (NERL), a person must hold a retailer authorisation (unless exempt from the requirement) prior to engaging in the retail sale of energy (electricity or gas). A retailer is generally a person (ie: a company) that engages in the activity of selling energy to customers for premises (see s.88 of the National Energy Retail Law for further information about selling of energy). The Australian Energy Regulator (AER) administers retailer authorisations.

Behind the meter is general terminology often used to describe assets located within a private installation that are owned and connected by a retail customer behind the connection point.

The aggregation of Consumer Energy Resource (CER) assets (including, but not limited to, generation assets such as rooftop solar PV and storage assets such as household batteries) by way of software and communications technology, to provide services to National Electricity Market (NEM) wholesale energy and/or ancillary services markets on behalf of end-customers who own the CER assets.

Community batteries (also called community-scale batteries) are energy storage systems connected at the distribution level which allow, among other things, households that generate their own solar power to store their excess electricity in shared storage for later use. These energy storage systems typically have power capacities of 100kW up to 5MW and can be used to provide energy storage solutions that deliver benefits to customers, networks and the market more broadly.

Consumer Energy Resources (CER) are assets and resources that connect to the network from behind a customer’s meter (ie: are located at the customer’s premises). They can be:

• small/medium scale generation assets such as solar photovoltaic (PV) or hydrogen fuel cells,
• energy storage that can store and deliver energy such as batteries or electric vehicles, or
• controllable loads that have flexibility and controllability in the times they can operate such as pool pumps or hot water units.

Common examples of CER include rooftop solar PV units, battery storage, electric vehicles and chargers, and home energy management technologies. 

The Declared Transmission System (DTS) (also known as the Victorian Transmission System, the Principal Transmission System) is a transmission pipeline network transporting natural gas within Victoria. It also supplies gas to NSW via the Interconnect with the Moomba Sydney Pipeline (MSP) at Culcairn and to South Australia via the SEA Gas Pipeline at Port Campbell. 

Covering most of Victoria, the Declared Wholesale Gas Market (DWGM) is a wholesale market that enables competitive and dynamic trading of gas injections and withdrawals from the Declared Transmission System (DTS), which link producers, storage providers, interconnected pipelines, major users and retailers. The Australian Energy Market Operator (AEMO) operates both the DWGM and the DTS, making it unique in Australia.

Victoria has an electricity licensing and exemptions framework. This means that persons undertaking a regulated activity, such as the sale or supply of electricity, need a licence unless there is an exemption that applies. There are two classes of exemptions. The first class is deemed exemptions. Deemed exemptions are automatic and do not need to be registered with the commission. The second class is registration exemptions which require the person undertaking the activity to apply to register their exemption with the commission, as a condition of the exemption.

In Queensland, a special approval provides authorisation for activities which would usually be authorised under a generation, transmission or distribution authority. A deemed special approval exists to allows for the connection of generating plant under 30MW to a network. No application is required for a deemed special approval.

A Demand Response Service Provider (DRSP) delivers market ancillary services and wholesale demand response services. A DRSP is a registered participant category within the National Electricity Market (NEM), administered by the Australian Energy Market Operator (AEMO).

In relation to electricity, distribution networks are the low voltage poles and wires that take power from the transmission networks to homes and businesses across Australia.

Distribution pipelines deliver gas from points along transmission pipelines to industrial customers, and from gate stations to customers in cities and towns.

Cars or other vehicles with motors that are powered by electricity rather than liquid fuels / internal combustion engines.

Embedded generation, also known as distributed or local generation, is any type of individual electricity generation unit that is connected to the electricity distribution network.

In some sites (typically apartment blocks, retirement villages, caravan parks and shopping centres) the electrical wiring is configured in such a way as to enable the owner of the site to sell energy to all the tenants or residents based there. This is known as an embedded network. The owner of a site with an embedded network usually buys energy from an energy retailer and then ‘on sells’ the energy to the different consumers at the site. In some situations, the energy sold by the owner may be generated on site. Most people that sell energy in embedded networks are known as ‘exempt sellers’. They have obtained an exemption from retail authorisation requirements, and must comply with particular conditions (as opposed to all obligations prescribed on retailers in the National Energy Retail Law (NERL) and National Energy Retail Rules (NERR). 

The Energy Advisory Panel The Energy Advisory Panel coordinates market bodies’ advice to governments under the National Energy Transformation Partnership on issues relating to the security, reliability, and affordability of Australia’s east coast energy system. coordinates market bodies’ advice to governments under the National Energy Transformation Partnership on issues relating to the security, reliability, and affordability of Australia’s east coast energy system. The EAP will include the heads of the three market bodies (AER, AEMC and AEMO) and the ACCC as an observer.

The Energy Security Board (ESB) has been replaced by the Energy Advisory Panel, but was responsible for the implementation of the recommendations from the Independent Review into the Future Security of the National Energy Market (the Finkel Review). The ESB also provided whole-of-system oversight for energy security and reliability. The ESB consisted of the heads of the Australian Energy Market Operator (AEMO), the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER).

Energy storage systems are devices that convert the electrical energy from power systems and store energy in order to supply electrical energy at a later time when needed. These include batteries and pumped-hydro facilities.

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.

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.

An electric vehicle (EV) charge point network is a group of EV charge points owned or operated by the same entity. EV charge points are equipment that connects an EV to a source of electricity so that it can recharge. This does not include chargers connected to a general power outlet.

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.

A FRMP is responsible for the settlement of any purchase of energy from the NEM or generation of energy to the NEM through that connection point.

Frequency control ancillary services (FCAS) are services procured by the Australian Energy Market Operator (AEMO) as market ancillary services to ensure the security, reliability and safety of the electricity supply system. These services are managed by the AEMO to maintain standards for frequency, voltage, network loading, and system restart processes.

Front of the meter is general terminology used to describe assets connected to the utility side of the retail customer connection point that form part of the distribution network. 

In Victoria, certain activities related to the small-scale resale, distribution and generation of electricity are currently regulated under the provisions of an Order in Council, called the General Exemption Order (GEO). The GEO provides for categories of ‘deemed exemptions’.

Any person who owns, controls or operates a generating system connected to a transmission or distribution network must register with the Australian Energy Market Operator (AEMO) as a generator, except where they meet the exemption criteria. Each of the generator’s registered generating units must be classified as market or non-market depending if the sent-out electricity is sold through the spot market and classified as scheduled, non-scheduled or semi-scheduled depending on how the generating unit participants in central dispatch.

The Innovation Enquiry Service (IES) provides innovators with informal guidance on how their new technologies or business models can be delivered under current energy regulation. This includes what energy regulation and market entry requirements might apply to your project, options that exist to adapt your business idea to progress under current energy frameworks, what energy bodies you might need to contact, as well as what processes and applications you might need to undertake, and why. For more information about what the IES does and does not provide, please see our About page, and our IES process page.

Under the Energy Rules, the Australian Energy Regulator (AER) is required to consider innovative trial principles in determining whether a trial project is “genuinely innovative” and therefore may be considered for a trial waiver. 

Interconnected national electricity system is defined in section 2 of the National Electricity Law (NEL). In substance it is the interconnected electricity network that spans Australia’s east and south east (including to Tasmania) to which are connected – (a) generating systems and other facilities; and (b) loads settled through the wholesale exchange.” This term does not cover off-grid systems that are not connected to other systems, e.g. systems supplying remote towns or properties that are not connected to the National Electricity Market (NEM).

A market customer is a registered participant within the National Electricity Market (NEM) that purchases electricity supplied through a transmission or distribution system to a connection point. Retailers and end users who buy electricity in the spot market must be registered with the Australian Energy Market Operator (AEMO) as market customers.

Any system supplying multiple customers not physically connected to the grid. Includes anything from a large town to two farms connected to each other. Generation sources typically include solar PV, wind turbines and small-scale gas generators and diesel engines.

Alternatively, microgrids are electricity networks that can be isolated and operated independently of the interconnected electricity system (or “grid”).
 

The National Electricity Law (NEL) is contained in a Schedule to the National Electricity (South Australia) Act 1996. It establishes the governance framework and key obligations for the operation of National Electricity Market (NEM), including the regulation of access to electricity networks. It is supported by the National Electricity (South Australia) Regulations. The NEL is applied as law in New South Wales, Queensland, Victoria, South Australia, Tasmania and the Australia Capital Territory by application statutes. The Northern Territory has also applied the NEL with variations that cater to local requirements.

The National Electricity Market (NEM) spans Australia’s eastern and south-eastern coasts and comprises of five interconnected states that also act as price regions: Queensland, New South Wales (including the Australian Capital Territory), South Australia, Victoria, and Tasmania. Western Australia and the Northern Territory are not connected to the NEM, primarily due to the distance between networks. The NEM’s transmission network carries power from electricity generators to large industrial energy users and local electricity distributors across the five regions. These assets are owned and operated by state governments, or private businesses.

The National Electricity Rules are made under the NEL and govern the operation of the NEM. They determine how companies can operate and participate in the competitive generation and retail sectors, and also govern the economic regulation of electricity transmission and distribution networks. Among other functions, they provide the regulatory framework and processes for market operations, power system security, network connections and access, pricing for network services in the NEM and national transmission planning. In Victoria, however, the national rules for network connections are modified, with many of the network service provider roles being assigned to AEMO.

The National Energy Consumer Framework (NECF) suite of legal instruments that regulate the sale and supply of electricity and gas to retail customers, including the National Energy Retail Law (NERL), the National Energy Retail Regulations and National Energy Retail Rules (NERR). The NECF is applied in each participating state or territory through state or territory laws. The NECF applies in Queensland, New South Wales, Australian Capital Territory, South Australia and Tasmania. Parts of it apply in Victoria. It does not apply in the Northern Territory, Western Australia or off-grid systems.

National energy rules are made by the Australian Energy Market Commission (AEMC) under the national energy laws, and are designed to promote efficient investment in, and efficient operation and use of, energy services for the long-term interests of consumers with respect to price, quality, safety, reliability, and security of supply.

The National Energy Retail Law (NERL), a Schedule to the National Energy Retail Law (South Australia) Act 2011, regulates the supply and sale of energy to retail customers. The Law is supported by the National Energy Retail Rules (NERR) and National Energy Retail Regulations.

The National Energy Retail Rules (NERR) govern the sale and supply of energy (electricity and natural gas) from retailers and distributors to customers in New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory. The NERR have the force of law, and are made by the Australian Energy Market Commission under the National Energy Retail Law (NERL).

The National Gas Law (NGL) and the National Gas Rules (NGR) set out the regulation of access to natural gas pipeline services provided by transmission and distribution pipelines under the national energy market framework.

The National Gas Law (NGL) and the National Gas Rules (NGR) set out the regulation of access to natural gas pipeline services provided by transmission and distribution pipelines under the national energy market framework.

A person who owns, operates or controls a transmission or distribution system must register with the Australian Energy Market Operator (AEMO) as a Network Service Provider (NSP).The Australian Energy Regulator (AER) may exempt a person from registering as an NSP if the person meets specific criteria. 

An off-grid system is a stand-alone power system or isolated microgrid that operates independently of the grid.

Peer-to-peer trading is the direct buying and selling of energy between two or more grid-connected parties.

These are the criteria by which applications for IES guidance or Trials will be assessed and prioritised in periods of high demand. 

For the IES, we will generally assess enquiries on a first-in, first-served basis. However, when demand for the IES is high, we will prioritise enquiries based on the criteria listed below. You will not be required to demonstrate that you meet these criteria as part of your query. 

• Enquiries that will yield new or valuable regulatory insights
• Enquiries that will benefit consumers experiencing vulnerability
• Enquiries that are similar to other enquiries being progressed and that can be grouped together and answered at the same time
• Enquiries from innovators without extensive regulatory resources or the ability to access this knowledge on their own

For trials, we will also generally assess applications on a first-in, first-served basis. However, when demand for the service is high, we will prioritise applications based on the criteria listed below. You will not be required to demonstrate that you meet these criteria as part of your application. 

• Projects focussed on addressing existing and emerging operational challenges in the National Electricity Market
• Projects that have consumer or local community support 
• Projects that are similar to other applications being progressed and that can be grouped together 
• Projects that have cross-industry support, for example (but not limited to) trials that stem from the Distributed Energy Integration Program 
• Projects benefiting consumers experiencing vulnerability
• Projects that are closer to being ready to commence
   

The Energy Innovation Toolkit’s Project Partners are the Australian Energy Regulator (AER), the Essential Services Commission (ESC), the Australian Energy Market Commission (AEMC), the Australian Energy Market Operator (AEMO), and the Australian Renewable Energy Agency (ARENA). For more information on Project Partner roles and responsibilities, please see our about page and our trials page.

Victoria has an electricity licensing and exemptions framework. This means that persons undertaking a regulated activity, such as the sale or supply of electricity, need a licence unless there is an exemption that applies. There are two classes of exemptions. The first class is deemed exemptions. Deemed exemptions are automatic and do not need to be registered with the commission. The second class is registration exemptions which require the person undertaking the activity to apply to register their exemption with the commission, as a condition of the exemption.

A Regulatory Sandboxing mechanism is a framework within which participants can test innovative concepts in the market under relaxed regulatory requirements at a smaller scale, on a time-limited basis and with appropriate safeguards in place. Regulatory Sandboxing mechanisms usually also offer enquiry services, which provide innovators with informal guidance on existing regulation. The Energy Innovation Toolkit is a Regulatory Sandboxing mechanism. 

Under the National Electricity Retail Law, a person must hold a retailer authorisation (unless exempt from the requirement) prior to engaging in the retail sale of energy. The Australian Energy Regulator administers retailer authorisations and exemptions.

Under the National Electricity Retail Law (NERL), a person must hold a retailer authorisation (unless exempt from the requirement) prior to engaging in the retail sale of energy. The Australian Energy Regulator (AER) administers retailer authorisations and exemptions.

A Small Resource Aggregator (SRA) is a person registered with the Australian Energy Market Operator (AEMO) to supply and consume electricity aggregated from one or more small production units, which are connected to a distribution or transmission network. A small production unit is owned, controlled and/or operated by a person who AEMO has exempted from the requirement to register as a Generator or an Integrated Resource Provider.

Solar panels capture the energy of sunlight which is converted into electricity. This is known as a photovoltaic system, usually called solar PV.

In Queensland, a special approval provides authorisation for activities which would usually be authorised under a generation, transmission or distribution authority. A deemed special approval exists to allows for the connection of generating plant under 30MW to a network. No application is required for a deemed special approval.

Stand-alone power systems are defined in section 6B of the National Electricity Law (NEL): “Stand-alone power system means a system that generates and distributes electricity; and does not form part of the interconnected national electricity system”. Alternatively, an electricity supply arrangement that is not physically connected to the national grid. The term encompasses both isolated microgrids, which supply electricity to multiple customers, and individual power systems, which supply electricity to a single customer.

In relation to electricity, a transmission networks is the extra high voltage poles and wires that take power from large scale electricity generators to distribution networks.

In relation to gas, transmission pipelines are the wide diameter, high-pressure pipelines which transport natural gas from processing or storage facilities over long distances to domestic markets.

The Trial Project Guidelines provide details on how the Energy Innovation Toolkit will assess trial waiver applications, including, how we will consider and grant trial waivers, as well as how we will oversee the conduct and outcomes of trial projects. 

Regulatory Sandboxing legislation will provide the Australian Energy Market Commission (AEMC) with a new power to make temporary rule changes to allow trials to proceed. This could be used to temporarily amend existing rules or to temporarily introduce a new rule of limited application. In deciding whether to make a trial rule, the AEMC must take into account the list of principles established in the Regulatory Sandboxing innovative trial principles, and the requirements listed in the Regulatory Sandboxing eligibility requirements, to determine whether a proposed trial rule is genuinely innovative. For more information about the innovative trial principles and eligibility requirements as they apply under the Energy Rules to both trial rule changes and trial waiver requests, please see the Australian Energy Regulator's Trial Projects Guidelines. 

The Regulatory Sandboxing trial waiver function allows the Australian Energy Regulator (AER) to grant a time limited trial waiver for eligible trial projects, exempting an innovator from having to comply with specified rules for a period of time to allow a trial to proceed. The Victorian Regulatory Sandboxing trial waiver function allows Essential Services Commission (ESC) to issue trial waivers providing time limited relief from Victorian energy frameworks. For more information, please see our trials page and the AER's Trial Projects Guidelines. 

A virtual power plant (VPP) is collection of distributed power-generating units connected by a central software that makes up a larger power plant. VPPs can be made up of combined heat and power asset, renewable generation through wind and solar farms, as well as battery storage. The units are dispatched together through the VPP, but each individual asset can operate independently.

A virtual power plant (VPP) operator is the party that centrally controls and monitors the VPP participants’ generation and battery systems within the network, and aggregates these assets to provide services to National Electricity Market (NEM) wholesale markets. They can offer a range of financial incentives and other benefits to households in return for joining a VPP.

Wholesale demand response services are flexible services purchased from the demand side (energy users) through the wholesale electricity market.

Wholesale electricity markets are markets in which generators sell electricity and retailers buys electricity. Retailers buy electricity to on sell to end users.