The National Electricity Rules (NER), established by the Australian Energy Market Commission (AEMC), regulate the operation of the National Electricity Market (NEM). These rules ensure that generators and consumers understand their roles and responsibilities as market participants and operate in line with established regulations.
Chapter 5A of the National Electricity Rules (NER), introduced through a 2014 amendment recommended by the Council of Australian Governments Energy Council (CEC), is often one of the most challenging sections to interpret. Let's break it down a bit.
What is the NER? A bit of history
The National Electricity Rules (NER) consist of 11 chapters, each with multiple sub-parts and divisions, detailing guidelines and information on topics ranging from becoming a market participant to network pricing and metering.
Before 2014, renewable energy had minimal impact on the Australian network, with only a few systems, such as rooftop solar installations, primarily aimed at reducing electricity demand on individual premises.
By 2014, the renewable energy industry had grown significantly, with larger system sizes, leading to challenges for developers in complying with Chapter 5 requirements, causing serious delays in connection processes.
To address these issues, the Australian Energy Market Commission (AEMC), at the request of the Clean Energy Council (CEC), introduced Chapter 5A: Electricity Connection for Retail Customers, to streamline the connection process for renewable energy generators.
Who needs to worry about Chapter 5A?
Chapter 5A of the National Electricity Rules (NER) is relevant to:
- Energy Consultants and Advisors: Those who provide guidance on regulatory compliance, system design, and connection processes for small-scale renewable energy projects.
- Renewable Energy Developers: Developers working on small-scale renewable energy projects, particularly those that fall under the "embedded generation" category.
- Electricity Retailers and Distributors: Companies responsible for connecting customers to the grid and ensuring that the connection meets the necessary standards.
- Installers and Contractors: Professionals involved in the installation and connection of renewable energy systems to the grid.
- Residential and Small Business Customers: Those looking to connect renewable energy systems, such as rooftop solar panels or small wind turbines, to the electricity grid.
The immediate and main impact is held by numbers 1 and 2 above.
What's Chapter 5?
- Systems connected under Chapter 5 are Registered Participants in the National Electricity Market (NEM), meaning they are generators or load owners who wish to buy or sell energy in the NEM.
- There are various categories for becoming a registered participant with the Australian Energy Market Operator (AEMO), and generators with a capacity of 5MW and above must be registered.
- A Battery Energy Storage System (BESS) must be registered to join the Frequency Control Ancillary Services (FCAS) market.
- A 1.5 MW BESS needs to apply under Chapter 5 to participate in the FCAS market.
- If the 1.5 MW BESS only wants to do energy arbitrage, it can apply under Chapter 5A.
- Timelines for processing are heavy duty
- Costs in application and processing can be significant
What's Chapter 5A?
- Chapter 5A allows for the connection of Non-Registered Participants, primarily smaller systems.
- The main difference between Chapter 5 and Chapter 5A is based on system size:
- Systems under 30 kW are considered micro-embedded generators and are assessed under model standing offers provided by the Distribution Network Service Provider (DNSP), with terms and conditions varying by DNSP.
- Systems between 30 kW and 5 MW are eligible for assessment under Chapter 5A, but applicants can choose to apply under Chapter 5 if they prefer. Requirements depend on system size and point of connection, and must be confirmed with the DNSP during the initial application.
- Systems over 5 MW are assessed under Chapter 5.
- Securing a connection agreement under Chapter 5A is generally easier than under Chapter 5.
- Chapter 5A is more attractive due to its smoother process, but large systems have limited scenarios where it applies.
- AEMO may grant exemptions for systems below 30 MW that export less than 20 GWh annually, but AEMO has the final decision.
- This can be a lot faster, the connection agreement under perfect conditions could come in under 100 business days once the response preparation is submitted.
- The response preparation can be labour intensive but the best thing to do would be to get an electrical engineer to represent you.
- Regardless of the process (Chapter 5 or Chapter 5A), your connection application and network modelling must comply with Access Standards.
What are the Network Access Standards and Generator Performance Standards (GPS)?
These are some power quality standards that each DNSP requires completed. Some of the typical demonstrations are:
- Reactive Power Capability
- Quality of Electricity
- Generating system response to frequency and voltage disturbance or following a contingency event
- Protection System
- Fault Current Contribution
These are usually calculated using software packages such as PSS E, PSS SINCAL or PSCAD. These are super expensive, not recommended to buy.
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