The Australian Energy Market Commission (AEMC) has announced two key steps to help batteries play a more critical role in a low-carbon future and ensure they’re rewarded for keeping the lights on.

A draft plan designed to integrate energy storage systems into the national electricity market outlines new measures to cut red tape so small batteries can earn extra income and large batteries have fewer cost and logistics hurdles to participating in the market.

And in a final ruling also announced, the AEMC has created new markets to financially reward ultra-fast energy providers like batteries for reacting at short notice when the system needs frequency control to avoid blackouts.

“The changes we’re announcing today recognise that energy is no longer a one-way transaction,” AEMC chair Anna Collyer says.

“The energy market is moving to a future that will be increasingly reliant on storage to firm up the expanding volume of renewable energy as well as address the growing need for critical system security services as the ageing fleet of thermal generators retire. Within two decades, installed storage is expected to increase by 800% − it will be central to energy flowing two ways.”

The AEMC’s draft energy storage plan simplifies arrangements for market players that send energy both ways. It improves how they register to participate in the market and streamlines their obligations.

By creating a universal category called an integrated resource provider, the same rules will apply to anyone who provides storage or combination energy services – whether it be batteries, pumped hydro, companies that aggregate energy from small generation and storage units or large-scale hybrid facilities that combine different technologies behind the one connection point (like factories with solar PV and a battery).

The change will level the playing field with other market participants. Batteries, for example, will no longer need to register twice (to both draw energy from the grid and send it out) as they are currently required to do.

For small customers, this will open up opportunities to earn more revenue for their home battery, because they can sign up with innovative new aggregator businesses who will pay them for using their battery at certain times. At the moment, aggregator businesses can only provide energy one way, but our changes will open up new business models for them.

“This change works in tandem with our existing proposals on distributed energy resources currently under consideration, which are designed to make home batteries a more attractive way to maximise solar investments,” Anna adds.

Following feedback from stakeholders, the implementation of these markets has been brought forward to October 2023.

The draft energy storage plan is still open for consultation, with submissions due on 16 September 2021 and a final determination the following month.