Driving the energy transition – navigating the complexity of AEMC’s new market changes for smarter, cheaper, cleaner energy   

Australians are driving one of the fastest transformations in electricity systems globally, fuelled by record investments in Consumer Energy Resources (CER).

To support this consumer led change, the Australian energy market is set to undergo significant changes in 2025, as new rules and technologies reshape how energy is generated, traded, and consumed.

One of the most significant updates is the Australian Energy Market Commission’s (AEMC) “Unlocking CER Benefits Through Flexible Trading” rule which is an important step toward a more decentralised and consumer-focused energy market.

By allowing flexible trading, the AEMC is helping to create a stronger and more sustainable energy system where consumers, businesses, and networks can all take an active role in managing energy and stabilising the grid.

Finalised in August 2024, this change aims to bring consumer energy resources—like rooftop solar and battery storage—into the energy market in a way that benefits both the grid and individual consumers.

According to the AEMC, Australian households and businesses are embracing CER at a growing rate. More than three million households and businesses in Australia have solar panels and every second household is expected to have them by 2040. More than fifty thousand small-scale battery systems have been installed in the past seven years, and twenty-two million purchases of electric vehicles are expected to be made by 2050.

This initiative aims to integrate CER into the National Electricity Market (NEM), improving reliability, reducing emissions, and lowering costs.

For the retailers, adopting these changes will allow them to offer a broader variety of energy products and higher value solutions. To unlock these benefits, utilities will need to first adjust their systems and processes to meet new standards and expectations.

This regulator led market changes can be a distraction for customer focussed retailers, if they are not delivered with time and budget certainty and in a way that acknowledges ongoing technology costs as a driver to cost-to-serve. 

At Gentrack, we’re focused on helping utilities adapt to these shifts with tools that make it easier to stay compliant and efficient.

Key arrangements

1. For commercial and industry (C&I):
   • Large customers (e.g., manufacturers, hospitals) can engage multiple energy service providers at a single premises without requiring separate network connections or embedded networks.
   • This framework reduces barriers and enables better participation in wholesale and ancillary markets.
2. For small customers:
   • Small customers can manage ‘flexible’ CER loads (e.g., EV chargers, batteries) separately from ‘passive’ loads (e.g., lights, fridges).
   • New metering arrangements allow the use of in-built device measurement capabilities, reducing costs and enabling participation in energy markets.
3. New meter types:
   • Introduction of three new meter types with lower specifications, enabling use of in-built metering technology in EV chargers, inverters, batteries, and streetlights for energy measurement and revenue billing.

Benefits and impacts

The new rules introduced are set to deliver significant benefits for both consumers and the energy market. By simplifying the use of Consumer Energy Resources (CER), the rules encourage more people to participate actively in the energy system. The rules also support smoother power system operation by integrating CER and Distributed Energy Resources (DER), including community batteries and shared arrangements. This integration helps the energy grid function more efficiently, leading to cheaper energy for consumers and industries. Additionally, the new approach to metering will allow for more accurate energy flow measurements, reducing costs and enabling consumers to save on their energy bills.

This will also enable businesses to have multiple retailer relationships—for example, one retailer for the gate meter, another for the solar battery system, and another for the fleet EV chargers. This creates increased competition and flexibility, allowing businesses to choose specialist retailer providers that offer compelling retail products tailored to CER solutions. However, it should be noted that such competition will currently be limited to C&I initially.

This change enables residential consumers to utilise secondary settlement points, such as those for batteries or electric vehicles (EVs), without requiring a secondary meter. Instead of installing an additional meter, billing can be based directly on the metering device embedded within the asset. This eliminates the cost and complexity of arranging a new meter installation on-site, offering more convenience and flexibility for both consumers and utilities.

Implementation

• Most rules effective by November 2026, with some earlier changes (e.g., in-built metering for streetlights/EV chargers by May 2026).
• AEMO and AER are required to finalise procedural and guideline changes by September and November 2025, respectively.

What’s ahead in the next year

Over the next year, utilities will face several key regulatory updates. For example, the push to speed up the rollout of smart meters will require updated infrastructure and operational changes. At the same time, regulators are introducing tougher penalties for non-compliance, placing more pressure on utilities to meet higher standards. On top of this, there’s a growing focus on integrating renewable energy into the grid, which will require new approaches to managing supply and demand.

These updates are significant, but they also offer opportunities to innovate and improve how the industry works.

Why compliance matters

Underlying market changes to accommodate the new structure of the premise highlight the need for careful adaptation. This rule change is particularly relevant for Commercial and Industrial (C&I) customers, where the primary challenges related to the complexity of systems changes. Retailers must innovate in the CER retail product space to maintain market share and presence, especially as increased contestability for specialist CER products intensifies competition.

A vision of the future: Australia’s energy market evolution

Australia’s utility market complexity stems from a unique mix of geographical, regulatory, technological, and political factors. While these challenges are significant, they also create opportunities for innovation, particularly in areas like renewable energy integration, grid management, and consumer engagement. Solutions such as smart grids, advanced software, and regulatory alignment will play a critical role in simplifying the market over time.

Regulatory developments like the introduction of the 5-minute settlement framework demonstrate Australia’s forward-thinking approach, with other countries observing and often following suit. For instance, New Zealand and Singapore are closely monitoring these changes, with New Zealand planning to introduce a “best offer” requirement in the near future. These shifts highlight Australia’s influence as a leader in energy market innovation and regulation.

Delivering with certainty

Retailers want a customer platform that is designed for compliance and the flexibility to adapt to new regulatory requirements. The platform should support, not hinder, future energy changes. A modern, market-based product like Gentrack is designed with market compliance at its core. Our regulatory and market solutions have guided our customers through significant market changes, such as Power of Choice (2017), 2020’s 5-Minute Settlements, and more recently, 2024’s Best Offer requirements.

We achieve this by first engaging with the relevant market bodies, including AEMO’s Gas Retail Consultative Forum, Electricity Retail Consultative Forum, Market Interface Technology Enhancements Working Group, NEM Reform Program Consultations, B2B Consultations, WEM Procedure Change Working Group, WA electricity consultations, and the Data Standard Body.

Next, we design our solutions in close consultation with our customers. This collaboration is critical, as retailers value flexibility in implementing changes, considering a mix of technology, process, and people changes to achieve their desired outcomes. Retailers also view their approach to these changes as a differentiator and require the ability to implement them in unique ways, while keeping their product solutions minimally customised.

Unlike many technology providers who treat these changes as one-off customisations—leading to systems that are costly to implement and maintain—Gentrack’s solutions are designed to minimise such impacts. This helps our customers maintain competitive cost-to-serve metrics and ensure adaptability to future regulatory and market demands.

At Gentrack, we’re committed to helping utilities succeed in this evolving environment. By providing the right tools and support, we can make the transition smoother and ensure our partners are not only compliant but also positioned to lead in this new era of energy.

Join us for our upcoming webinar, ‘Driving the energy transition: navigating the complexity of AEMC’s new market changes for smarter, cheaper, cleaner energy’, taking place at the end of February 2025. We’ll explore the latest market changes, discuss best practices for implementing them effectively, and provide insights into how Gentrack can support your journey toward compliance and leadership in this transformative energy landscape.

Register your interest by contacting us here.