Customer choice is key challenge for energy market

Enabling customer choice in the changing energy market will be a challenge for the next decade, AusNet Services General Manager Network Engineering, Siham Knowles said at a CEDA Victoria event on securing Australia’s energy future.

“As much as we’d like them to, we don’t expect that all customers will use solar panels and battery storage, or even electric vehicles, in the not too distant future,” she said.

“Some will have them, some won’t, some will be part of sophisticated micro-grids and mini-grids and others will just go it alone.

“So for us enabling customer choice in that environment, without compromising supply reliability and safety, and without imposing additional costs on all customers is our biggest challenge.”

Ms Knowles said there were three key challenges underpinning customer choice.

“The first one from a network perspective is actually sizing up the network for future requirements,” she said.

“We don’t want to over build and we don’t want to over invest in the network because that will be too costly for everyone.

“But at the same time we need to provide safe, reliable energy and we need to provide customers with access to the network for whatever they want to use it for.”

Ms Knowles said it’s a challenge to forecast customer needs and provide transparency when the requirements of the energy network are largely unknown.

“We believe in order to solve this issue, coordination and a more systematic way of planning the entire system will be required,” she said.

Ms Knowles said the second challenge is transitioning the network and redefining its role.

“From a network that’s essentially been a one-way delivery platform to a bi-directional optimisation platform for distributed energy resources,” she said.

“One that is dynamic and that is going to allow the trade of energy and energy services.

“For that to occur we need innovation in technology, we need innovation in business models and collaboration with technology partners.”

Ms Knowles said the final challenge is balancing the long-term interests of customers in a competitive market.

“We are a regulated network services business but at the end of the day we are now operating in a competitive market where there are real alternatives for customers,” she said.

“I think even a bunch of engineers get that if customers don’t choose your services then you don’t have a viable business going forward.

“One of the key things that we believe is important for us is to move to fairer prices.

“We want fair access to electricity for everyone and moving to fair prices are a key part of that.”

AGL Chief Economist, Dr Tim Nelson also spoke about equity for all in the energy market.

“Historically there’s been a whole bunch of unique regulations and other approaches within our industry dealing with vulnerable consumers,” he said.

“We provide an essential service and the reality is we as a collective industry are going to have to do a much better job in bringing vulnerable consumers along with us on this journey.

“For people who don’t have access to capital to put in systems, people who can’t engage with the market on a day-to-day basis, whatever the reason it’s something that we need to do a much better job of.”

Greensync Chief Executive Officer and Founder, Dr Phil Blythe spoke about consumers being perceived as investors in the energy system.

“If they’re going to take up 20-30 per cent of the distributed energy that is being put into the grid they’re now investors in the system,” he said.

“That really does make us think that if battery storage systems and solar on people’s roofs are being put out there, those consumers need to have the right to get their money back and participate in all forms of this conversation.”

Australian Energy Regulator Chair, Paula Conboy spoke about the energy market going through a period of transition.

“We are working towards ensuring that during this transition we can maintain reliability and security,” she said.

“We’re making sure that the regulatory framework can support the market evolution, regardless of what the future is going to look like.

“It’s important that we have a framework that is sufficiently flexible so it can accommodate different futures, but also predictable so that we can have that investor confidence.

“Competition is what provides customer choice, innovation and the lowest possible prices.

“We’re redrawing the lines between what’s competitive and what’s regulated and making sure that the regulated components of the network are done on an incentive base and not on a prescriptive base process.

“So, it’s competition where possible and regulation where necessary.”