The rise of the energy “prosumer” will lead to a revolution in Australia’s energy market, the Australian Energy Regulator says – and the consequences for some in the industry could be disastrous.
With electricity consumers increasingly able – and willing – to generate and store their own electricity, the AER has warned that unless models are changed to allow these prosumers to fully participate in the market, and barriers removed, then many will quit the grid.
“The electricity industry certainly is changing. In fact it is not much of a stretch to say that the next couple of decades will witness something of a revolution in the way small customers interact with the electricity industry,” Michelle Groves, the chief executive of the AER, said in a speech earlier this week.
“In the future there will be more scope for even the smallest energy users to become active participants in the energy market.”
Groves stressed that it was important for the network businesses to embrace the changes underway in the energy sector.
“If the networks attempt to create barriers to new, competing technologies by limiting access to their ‘platform’, there is a risk that a significant number of consumers will ‘walk away’ from the network,” she said.
“This would have major consequences for many consumers and for the efficient operation of energy markets. The hope is that network businesses re-define the services they provide to adapt to the new market, which will benefit end-users and transform the industry.”
Groves says the changes are being driven not just by the availability of cheaper technologies, but also improvements in IT and communications.
This means that “prosumers” can switch from net consumption from the grid to net production.
“We have seen over a million households install roof-top solar PV in the last few years,” she says.
“Further, customer investment in smart appliances and battery storage could substantially shift the amount customers withdraw from or inject into the network from one moment to the next.”
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