Energy system transformation

From 2020 to 2023, we collaborated with the Australian Energy Market Operator (AEMO) to develop and trial a future model for the National Electricity Market (NEM). This model integrates distributed energy resources (DER), such as rooftop solar panels and home batteries, with existing NEM assets to provide affordable, zero emissions energy for all Australians. This work, under Project EDGE, was funded by the Australian Renewable Energy Agency (ARENA) and developed essential capabilities for the NEM’s evolution, including:

Term	Description
Aggregator / Virtual Power Plant (VPP)	Synonymous terms, these actors represent many customers' DER, collectively managing devices to provide electricity services, sharing benefits with customers. Customers grant Aggregators permission to use their DER and data within their preferences. Aggregators may also be electricity retailers.
Dynamic Operating Envelope (DOE)	A dynamic operating envelope provides upper and lower bounds on the import or export power, in a given time interval, for either individual DER assets or a connection point. An export-only version ("Flexible Export Limit" or FEL) is currently being offered in South Australia.
Bi-directional Offer (BOffer)	Bi-directional Offer means a market offer that includes both generation and load across the aggregator's registered portfolio of customer sites or NMIs. This is consistent with current NEM configurations (IESS rule change).
Wholesale Dispatch Instruction	Dispatch Instructions are issued in the NEM by AEMO to Aggregators for the purpose of meeting the supply and demand balance in EDGE by either generating/exporting to the grid or by consuming/importing from the grid as a single DER portfolio.
DER Data Exchange Hub	Refers to digital infrastructure allowing data exchange between multiple industry actors such as Aggregators, Networks and AEMO. In EDGE, the DER Data Exchange Hub facilitated operational coordination between all parties but did not coordinate customer DER directly.

_{Figure 1- Key concepts trialed under EDGE}

Distributed energy resources management systems

Our low-voltage distributed energy resource management systems (LV DERMS) is a new system that securely connects to customer’s distributed energy resources (DER) via the internet. This allows for near real-time remote management of these devices. This was implemented in 2024 to meet the need for system security measures to manage minimum system load conditions in the NEM.

This will support the exponential growth in distributed PV generation that our customers are seeking to install in their homes and businesses. A third of our customers have already invested in DER/CER and that is expected to more than double in the next 20 years.

Victorian Solar Emergency Backstop

In 2024, we applied insights from the Project EDGE trial to launch the Victorian Solar Emergency Backstop. This went live on 1 October 2024 under direction from AEMO and the Victorian government. This program manages periods of low demand and high solar export without compromising system security or impacting access to electricity. Our low voltage DERMS system was the foundation for this work.

What is next for DERMS?

Our strategy for 2025 and beyond is to continue developing DERMS to deliver programs such as Flexible Export Limits and Dynamic Operating Envelopes. These aim to improve network assets usage and offer consumers more choice in how their consumer energy resources (CER) investments in PV, batteries, and EV work with the electricity system.

Distribution System Operator (DSO)

Over the past 10 years, Australian consumers have invested heavily in rooftop solar.

As more new energy technologies are adopted, such as battery storage systems, smart appliances and electric vehicles, the grid is becoming increasingly decentralised. These DER and CER are paving the way for a cleaner, smarter and more efficient electricity system. However, this transition from the traditional one-way power flows to two-way flows will require distribution network service providers (DNSP) like AusNet, to implement new systems, capabilities and processes. This future state of distribution businesses has been referred to as Distribution System Operator (DSO).

In addition to existing electricity distribution services, DSO will provide reliable and efficient DER operations. This involves improving how we maintain and manage the distribution system, with a key factor being the optimal and secure integration of all elements of the system.

The transition to the DSO model would mean that electricity distributors in the NEM continue to undertake the duties of a DNSP. However, this includes increased responsibilities from recent technologies, flexibility of distributed resources, and evolving customer needs and expectations. DERMS capabilities are a central element of this transition.