Reform to the Australian energy market performed by the country’s Energy Market Commission is set to benefit the cogeneration sector.

Up until recently there have been many barriers to the proliferation of CHP technology, whether at government, business or industrial level however these barriers made the connection process uncertain, complex, time consuming, inefficient and costly

In particular, an embedded energy proponent had been required by the National Electricity Rules to reach an agreement with the electricity distribution company that operates the poles and wires to the building. The multiple distribution companies across Australia follow different connection processes and have little incentive to facilitate connections. As a result, the connection process could take up to three years or longer, effectively crippling a commercial project.
Australian Energy Market Commission
Climate Spectator reports that in 2011, a partnership between ClimateWorks, the Property Council of Australia and Seed Advisory began work to address these barriers and facilitate the greater deployment of co/trigeneration and other technologies.

The Unlocking Barriers to Cogeneration Project established a working group including customers, market participants, regulators, operators and policymakers to identify barriers and find practical and implementable solutions.

The result was a proposed set of improvements to the connection process for all embedded energy systems through features such as fixed timeframes and information being provided upfront. The proposed solution was converted to a formal rule change request and submitted to the AEMC in April 2012. It became the first successful rule change proposal from ‘customers’ of the energy market. After three rounds of public consultation by the AEMC and submissions from over 44 organisations, the rule change was finally approved on April 17 – two years after the formal process for change began.

What this means in practice is that from October 1st, it will be cheaper and faster to connect co-generation, tri-generation and renewable energy to the electricity distribution grid in much of Australia. The new rule will apply to medium to large systems (over 5 MW) in NSW, South Australia, Victoria, Queensland and Tasmania. Until Queensland and Victoria move to the National Electricity Customer Framework, small embedded energy systems can also apply for connection under this process.

The new rule provides customers with a clear map of the new connection process, timed connection stages instead of an open-ended process, and specific time periods for electricity network companies to consult third parties during the application stage.

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