Australia: Battery technology for renewable energy generation and storage drives electricity rule changes

Last Updated: 22 August 2016
Article by Dan Howard and Will Waldron

Proponents who want to install and operate batteries will need to keep an eye out for more regulatory changes that may come from the AEMC Integration of Energy Storage review.

The use of batteries is set to play a key role in the ongoing development of renewable energy generation, demand side management and network support. Rapid advancement in battery technology means that we are fast approaching the point where batteries are of the size and performance that will enable them to be integrated into large scale renewable developments, store and generate significant amounts and provide valuable network support.

One challenge that is being posed by a rapid uptake of battery installations, along with other "non- traditional" forms of energy storage and release, is how best to categorise these within the current regulatory environment.

In October 2015, the Australian Energy Market Commission (AEMC) published a discussion paper seeking stakeholder views on the ability of the existing regulatory framework to accommodate storage devices such as batteries, as well as any suggested solutions. As a result of this process and submissions from interested parties the AEMC produced a range of recommendations on how storage devices should be treated and accommodated within the current electricity regulatory framework.

The AEMC's Recommendations

The AEMC provided the following 10 recommendations:

  1. Services including battery storage services provided by network providers behind the meter are to be contestable and must be ring fenced from the network service providers regulated network activities.
  2. The Australian Energy Regulator should develop ring fencing guidelines that will apply to separate the network activities from storage service should include the ability of network service providers to obtain access to battery related services by contracting for them from battery owners and operators.
  3. Incentives should be considered for network service providers to substitute opex expenditure on battery storage for capex.
  4. Lead times in the AEMC planning process to be reviewed to see if they are appropriate in the face of changing technology and the increase in distributed energy resources (including increased penetration of batteries in their generation capacity).
  5. Any interested party may submit a request for a rule change to remove the ambiguity regarding the definition of generating unit and when a battery owner/operator is to be treated as a generator within the NEM.
  6. AEMO should conduct a review of the existing registration category of small generator aggregator to determine whether it is suitable for combined multiple disaggregated storage devices behind the meter for participation in the NEM.
  7. AEMO should conduct an assessment of whether technical limitations applying to small generator aggregators are suitable for those parties wishing to offer FCAS (ancillary services in the NEM).
  8. AER to review the existing network service providers basic connection services for micro embedded generators to ensure that they are clear about the ability to connect the storage system and export to the grid.
  9. AEMC will conduct a technical review of the technical standards in the NER to assess their applicability for connection of storage by a registered participant either as a generating system or a load.
  10. AEMC will conduct a review of the technical requirements that apply to the connection of micro-embedded generation to ensure they are appropriate for matters such as remote control and network service providers ability to control its network.

Why has the battery / generator distinction caused so much confusion?

Batteries have different characteristics from traditional generators in that they both store and produce electricity from an electrochemical reaction process. Accordingly, batteries can be both a consumer of electricity when they are being charged and a producer of electricity when they are being discharged.

The National Electricity Rules require a person that engages in the activity of owning, controlling or operating a generating system that is connected to a transmission or distribution system. A generating system is a system comprised of generating units that are registered with by a person (generator) on application to and with approval of AEMO.

Previously, the phrase "generating unit" was defined in Chapter 10 of the National Electricity Rules as:

"The actual generator of electricity and all the related equipment essential to its functioning as a single entity".

The traditional meaning of a generator was a device that converted mechanical energy to electrical energy; as a result, some would say that a battery, which can store and produce electricity from an electrochemical process, does not constitute a generator.

To make eligibility for registration as a Generator technology-neutral and to remove uncertainty as to the qualification of batteries, the AEMC proposed changes to the National Electricity Rules which were adopted on 26 May 2016. These changes amended the definition of "generating unit" in Chapter 10 of the National Electricity Rules to read as follows:

"The plant used in the production of electricity and all related equipment essential to its functioning as a single entity".

In addition, clause 2.2.1(b) of the National Electricity Rules which provided that a person "who otherwise supplies electricity to a transmission or distribution system" could apply for registration, was removed as it served no further purpose following the above definition change.

As a consequence, it is now clear that non-conventional producers of electricity such a batteries will also qualify as generators for the purpose of the National Electricity Rules. This allows AEMO to address applications for registration from non-conventional generation without risk that it is acting outside of its powers. The Commission is of the view that a person seeking to participate in the NEM using a storage device should be registered, however, the Commission acknowledges that there is a separate issue, which is yet to be addressed, about whether one device can be registered to perform more than one activity (for example, whether a participant can register a facility as both a market generating unit and a market load).

Being compliant under the National Electricity Rules

Due to the rapidly growing area of renewable energy generation and storage, there is an equally important need to revisit existing energy regulations to ensure that there are uniform rules and no unintended barriers to the uptake of new technology. The recent amendments to the National Electricity Rules and the AEMC review recommendations are clear steps to ensure that the advantages of battery storage and battery generation are fully available.

Depending on the proposed use of batteries in the energy supply mix, there is still potential for a proponent to require multiple registrations (ie. as load customer and as a generator). Accordingly, it is important that each use of a proposed battery is assessed for its registration requirements taking into account:

  • whether the battery will export power to the network or whether it is operating solely behind the meter;
  • the size of the battery and its generation capability;
  • whether the battery will be installed as part of a renewable generating system (eg in conjunction with solar pv); and
  • whether the battery will take power from the network.

Each of these factors will impact on the registration requirements or whether exemptions are available under the National Electricity Rules.

For proponents wishing to install and operate batteries it will be necessary to keep abreast of further regulatory changes that may come about following the AEMC recommendations from its Integration of Energy Storage review.


Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.