The Australian Energy Regulator (AER) has granted New South Wales electricity distributor Ausgrid a controversial trial waiver so it can experiment with the co-ordination of community batteries and private solar power installations within part of its networks.
What’s Ausgrid’s Community Power Network Trial (CPN) Involve?
Essentially, the CPN will be in the form of a Virtual Power Plant (VPP).
Ausgrid wants to accelerate rollout of Consumer Energy Resources (CER) and Distributed Energy Resources (DER) such as rooftop solar systems and batteries; closely coordinating how energy is generated, stored and shared for the purposes electricity redistribution during the evening peak, and to trade on the wholesale market to generate profit.
The proposed trial is expected to involve around 32,000 customers in Charmhaven, which is primarily a residential area on New South Wales’ Central Coast, and inner Sydney’s Mascot/Botany; where properties are mainly commercial, industrial and apartment buildings.
As part of the trial, Ausgrid is to offer incentives for customers to install additional rooftop solar panels. Ausgrid will also own and operate 130MWh of community battery assets and install up to 70MW of solar generation capacity as a supplier of last resort if third parties are unable to provide this service.
Profit-Sharing With Participants
Ausgrid proposes to share profits with trial customers and estimates a dividend pool of $22.9m will be generated across the project’s 5-year duration — which works out to an estimated $100-$150 off the annual electricity bill for a typical household.
The company says everyone involved will benefit, whether they have solar panels or not.
Participants without solar + storage
Lower energy bills and an estimated $150-$200 per annum dividend payment to offset bills.
Customers with solar, without battery storage
Among the benefits will be a feed-in tariff increase of around 2-4c per kWh, which will work out to around $100 annually. Additionally, there will be an annual dividend to offset electricity bills.
New solar, without storage
Participants will earn approximately $125 per year for each additional kW of solar capacity; plus an annual dividend payment.
Those with solar and storage
Participants will be able to store and consume all their own solar, electricity costs will be decreased, and a higher feed-in tariff paid for surplus solar energy.
Why Was A Trial Waiver From The AER Needed?
A waiver was required in order for the project to proceed as it involves Ausgrid entering contestable market activities and sharing profits, which isn’t allowed under AER ring-fencing rules separating monopolies from competitive energy services.
Ausgrid also sought a waiver from National Electricity Rules (NER) clause 6.6.5 relating to reopening its 2024–29 distribution determination for capital expenditure so that it could recover trial costs from its customers. That was denied as the AER is unable to waive this clause.
Why Has The Trial Caused Concerns?
Stakeholders and the public were invited to lodge submissions concerning the potential waiver, the prospect of which ruffled a few feathers.
Among key issues were concerns the Community Power Network trial will undermine market competition, lack transparency and fail strong consumer protection tests. Some have argued since Ausgrid is a regulated monopoly venturing into competitive markets (hence the need for a waiver), the situation could potentially distort prices and bypass proper regulatory scrutiny.
A listing of submissions can be viewed here.
The AER Decision
In announcement published on Friday, the AER said it would issue the waiver; good for 5 years.
“We have a comprehensive set of conditions and expectations for this trial that protects consumers and which we consider will deliver valuable learnings to the sector around how to roll out and extract value from battery and solar assets,” said AER Board Member Lynne Gallagher. “We need to utilise more of our network for local generation, create more value from it and share it with consumers. This trial points to one way Ausgrid can use its network more efficiently.”
The AER’s decision doesn’t allow Ausgrid to “directly” hit customers with costs for the trial through a reassessment of its current regulated asset base and represents the AER’s first ‘policy-led’ waiver granted since establishing its new approach to sandboxing in February 2025.
Community Power Network Trial Timeline From Here
Spatial energy planning and arranging partner contracts are next in line, with view to starting construction in the middle of next year. Ausgrid anticipates the first tranche of solar and storage will be place and actively managed by the middle of 2027.
The pilot will finish up in 2031 at the latest, with regular reviews and shared learning provided along the way. After it concludes, the program could be mothballed, modified or scaled up depending on outcomes.
For further information on Ausgrid’s Community Power Network Trial as it becomes available, see this page.
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“A waiver was required in order for the project to proceed as it involves Ausgrid entering contestable market activities and sharing profits”
So, that’s the retailers complaining about a new competitor?
Not quite, but if it were, it would be like a shopfront retailer’s new competitor having a monopoly on the trucking and logistics they rely on as well.
A higher FiT and reduced bills, sounds good from the consumer point of view.
FiT seems to be in a race to zero now. Many of my providers in the Ausgrid network are offering a juicy FiT of $0.15 to $0.25 – but only from the late afternoon when the sun isn’t or is only barely shining. $0.00 the rest of the time….
I reckon FiT is in a race to batteries now, in a straight shot down Reality Road. At this time of year at least, it is rare for exported solar to encounter a market above 0c/kWh. If you can delay those exports until after dark through a battery, it is rare for it not to be able find a market over 20c/kWh; and a very occasional $20/kWh, where the big bucks are made (and average retail prices distorted).
Having discovered that battery owners won’t be bullied into exploitative VPPs as the gentailers had hoped (and lobbied governments to force), they are finally getting around to competing for battery exports in the peak for some realistic FiT prices.
This, with evaporated daytime FiT as a casualty, is all a good thing though.