How we assess trials

Requirement

Assessment factors

Eligibility requirements under the Energy Rules

Whether the carrying out and monitoring of the trial project is likely to contribute to the development of regulatory and industry experience

The AER will consider factors such as:

• the nature of the trial project, such as whether the project is proposing new or materially improved approaches in relation to energy markets or energy supply
• the aims and objectives of the trial project
• the extent to which the project can inform improvements to the regulatory framework
• the extent to which the project can be rolled out more broadly by both the trial proponent and potentially other parties to the benefit of consumers

Whether the trial project may have an adverse effect on the safety, reliability or security of supply of energy and the measures that the applicant will take to avoid or mitigate such risks

The AER will consider factors such as:

• the provisions of the laws/rules the applicant is seeking a waiver from and the role those provisions play in maintaining the safe, reliable and secure supply of energy
• the applicant’s proposed risk management plan
• advice from AEMO

Whether the trial project may have an adverse effect on AEMO’s operation and/or administration of the power system, the market, the declared distribution systems and declared transmission system for gas or markets for natural gas and the measures that the applicant will take to avoid or mitigate such adverse effects

The AER will consider factors such as:

• the provisions of the laws/rules the applicant is seeking a waiver from and the role those provisions play in allowing AEMO to perform its functions
• the applicant’s proposed risk management plan
• AEMO’s views on the trial project

Whether the extent and nature of the trial project confidential information claimed by the applicant may impair:

1. the AER’s ability to provide appropriate public transparency in relation to the conduct and outcomes of trial projects; or
2. the appropriate development of regulatory and industry experience arising from the trial project.

The AER will consider factors such as:

• the nature of the trial project confidential information claimed by the applicant
• how the claimed confidential information relates to the proposed aims, objectives and success criteria for the trial project
• the ability to publish sufficient information to allow the wider industry to understand the nature of the project and learn from its outcomes, potentially aggregated with other case studies
• the ability to publish sufficient information to help support a change to the regulatory framework to the benefit of consumers

Innovative trial principles – Energy Laws

Whether the trial project is focused on developing new or materially improved:

• approaches to the use or supply of, or demand for, electricity
• customer connection services or customer retail services
• natural gas services

The AER will consider factors such as:

• the nature of the trial project
• the aims and objectives of the trial project
• whether the project could lead to cost savings, add value to existing services (e.g. through improved quality, safety or reliability and security) or introduce new services that consumers value
• whether similar projects have been implemented previously or are currently being used elsewhere

Whether the trial project is likely to contribute to the achievement of the national energy objectives

The AER will consider factors such as whether the trial project will improve:

• efficiency of investment in energy services
• efficiency of operation of energy service
• efficiency of use of energy service

and, in doing so, lower the price consumers pay or improve the quality, safety and reliability and security of energy services and/or the overall energy system

Whether the trial project is able to demonstrate a reasonable prospect of giving rise to materially improved services and outcomes for consumers of energy

The AER will consider factors such as:

• the nature of the trial project
• the aims and objectives of the trial project
• whether the project could lead to cost savings, add value to existing energy services (e.g. through improved quality, safety or reliability and security) or introduce new energy services that consumers value
• whether the project could improve outcomes for consumers experiencing vulnerability
• whether the benefits to consumers from the improved services and outcomes are likely to outweigh any risks associated with the project
• evidence of the organisation’s operational and financial ability to carry out the proposed trial project

Whether the trial project maintains adequate consumer protections, including whether the trial project may involve risks to consumers and (if so), how those risks might be mitigated

The AER will apply the Consumer Risk Assessment tool developed by the Energy Security Board. The AER will also consider factors such as:

• The type of risks associated with the trial project, such as financial, safety or security
• The magnitude of the risks
• The probability of the risks eventuating
• The types of consumers that could be impacted, particularly the impact on consumers experiencing vulnerability
• The complexity of the trial and associated risks and whether it is reasonable for consumers to give their explicit informed consent to take on that risk
• Whether the risks can be appropriately managed or mitigated
• Whether the risks associated with the trial are appropriately allocated between the trial waiver applicant, any retail customers participating in a trial project and, if relevant, other parties.

Whether the trial project is unable to proceed under the existing regulatory framework

The AER will consider factors such as:

• The nature of the trial project
• the provisions of the laws/rules the applicant is seeking a waiver from
• whether there are alternative approaches the applicant could pursue, including seeking a waiver or exemption under alternative frameworks (e.g exempt seller, ring-fencing etc)

Whether the trial project has moved beyond research and development stages but is not yet established, or of sufficient maturity, size or otherwise commercially ready, to attract investment

The AER will consider factors such as:

• the nature of the trial project
• the aims and objectives of the trial project
• whether the project has gone through any initial trials or testing

Whether the trial project may negatively impact AEMO’s operation of the national energy systems and national energy markets or AEMO’s facilitation of customer connection services and customer retail services and, if there are impacts, how those impacts can be mitigated

The AER will consider factors such as:

• the provisions of the laws/rules the applicant is seeking a waiver from and the role those provisions play in allowing AEMO to perform its functions
• the applicant’s proposed risk management plan
• AEMO’s views on the trial project

Whether the trial project may impact on competition in a competitive sector of a national energy market

The AER will consider factors such as:

• The energy market(s) in which the trial project would operate, if any
• Whether the project could reduce competition in that market
• Whether trialling the project would confer an unfair competitive advantage on the applicant that could be detrimental to competition in an energy market, including the potential for cross-subsidisation and discrimination
• Whether the trial project could reduce the ability of consumers to switch their energy supplier

Innovative trial principles – Energy Regulations

Whether the trial project is able to be trialled and evaluated

The AER will consider factors such as:

• whether there are other barriers to the project proceeding that cannot be resolved through a trial waiver
• evidence of the organisation’s operational and financial ability to carry out the proposed trial project
• the aims, objectives and proposed success factors of the trial project and the extent to which these are measurable and so can be evaluated

Whether there is potential for the trial project to be successfully expanded

The AER will consider factors such as:

• whether the trial project is scalable
• whether the trial project is applicable across multiple jurisdictions and customer types

Whether the trial project will provide for public sharing of knowledge, information and data resulting from the trial project.

The AER will consider factors such as:

• the aims, objectives and proposed success factors of the trial project
• the trial project confidential information claimed by the applicant