Governance of DER technical standards

Distributed Energy Resources (DER) in Australia currently include millions of distributed air conditioners, hot water systems, pool pumps and other large appliances (load which is or could be flexible), over 2.2 million rooftop PV systems and a few thousand small diesel generators and approximately 10,000 distributed batteries. While DER can deliver benefits to many parts of the electricity system, without appropriate technical standards widespread uptake of some forms of DER  could also have impact on secure operation of the electricity system. As DER uptake increases, the timely application of nationally consistent device standards for DER is important so that customers are able to realise the benefits, without adversely affecting the secure operation of the electricity system. Given the pace of DER deployment, it is important that DER technical standards are put in place in a timely fashion for the industry.

In the short-term, the ESB is preparing a rule change request (through the AEMC’s rule change process) to implement initial, national DER device standards in the National Electricity Rules. The initial standards would build on the work of AEMO through the Distributed Energy Integration Program (DEIP) working group and be finalised in consultation with all stakeholders.

The rule change request will propose implementation of new standards focused on needed updates to inverter standards to ensure system security, the development of communications, data and control functionality and integration of cyber-security standards. The rule change request will also include proposed requirements for compliance and provisions for enforcement, as well as measures to smooth transition and recognise existing standards ahead of any major changes.

In the medium to longer-term, substantive changes are needed to the overall governance of DER technical standards. Recognising that new governance arrangements need to be put in place to continuously review and develop the DER technical standards, the ESB commissioned a review into the Governance of DER Technical Standards (Review) in December 2019.

The Review highlights that to date the governance of DER technical standards has been fragmented, lacking clarity of roles and coordination. In addition, resourcing is inadequate and the pace of change is slower than needed given the rapid deployment of DER in the NEM. The result is that DER systems deployed today are not necessarily able to deliver the performance levels and services required to support system security, efficient and effective distribution network management and the optimisation of DER benefits for all electricity system users.

The Review identified seven different existing governance arrangements for DER technical standards which are largely independent from one another and vary from voluntary to incentivised to mandatory.

The Review identified critical gaps and weaknesses in the current governance system, including:

  • An overall lack of leadership and coordination and clear objective as to how DER technical standards should be governed.
  • Weaknesses in the Standards Australia technical standards process in terms of speed, transparency, participation and decision making not being explicitly aligned with National Electricity Objective.
  • Lack of harmonisation in network connection standards across Distribution Network Service Providers (DNSPs).
  • Under-resourcing of compliance and enforcement activities, and gaps especially for non-safety related standards.

The Review proposes four options to improve the governance of technical standards: maintain the status quo (implement quick wins only, option 1), modifications to the existing arrangements through targeted interventions such as additional resources (option 2); the development of a new coordinating structure and processes (option 3) and wholesale reform including the centralisation of DER technical standards governance decision-making through a new body (option 4).

It is proposed that in parallel with the rule change process, the ESB will undertake further work to develop and assess these options and bring a recommendation to Council in October 2020.