Submission to review of the regulatory frameworks for stand-alone power systems issues paper

PIAC lodged a submission to the AEMC’s review of the regulatory frameworks for stand-alone power systems. PIAC supports distribution network service providers (DNSPs) pursuing the least-cost option to provide regulated network services. Where this option is the use of a Stand-Alone Power Supply (SAPS), this should be facilitated by the regulatory framework.

A DNSP may lead an existing consumer to be supplied by a SAPS:

• where the consumer has not sought a change to their method of electricity supply and any change is done “behind the scenes” by the DNSP. In this case, the DNSP retains the obligation to maintain comparable levels of supply to the customer as under a tradition grid connection.
• where a consumer foregoes their entitlement to receive energy from the grid in return for a payment from the DNSP, is then supplied via a SAPS that they own or lease. These consumers will require additional protections to those currently afforded to off-grid customers to reflect the greater risk should the SAPS fail to operate as expected.
  PIAC recommends the AEMC consider both potential paths for a DNSP-led transition to off-grid supply, and our submission focuses on possible arrangements under the first case, as this is the ‘low hanging fruit’ for DNSPs, particularly in rural and remote areas where consumers are expensive to serve through traditional network options and receive relatively poor reliability and quality of supply.

  Our submission proposes a number of configurations for providing SAPS to single or multiple customers – and a number of cost recovery models – some of which can include the retention of retail arrangements like a traditional, grid-connected supply so that the consumer experiences little or no change to their electricity supply arrangements.