The rule maker for the Australian electricity market has made a new draft rule. The idea is to facilitate competition in the energy services market, specifically for battery storage and other distributed energy resources which are "behind the meter", or on the customer's side of the electricity network. In short the rule restricts network service providers' ability to earn regulated returns on behind the meter assets.

What this means is that network service providers will have to buy distributed energy resources from third parties, rather than earn the return from these services themselves. The change reduces the risk of network service providers using their monopoly position to favour benefits for the network, at the expense of maximising value across the energy system. This is achieved by putting the choice of how these assets are utilised in the hands of consumers (who are, believes the AEMC, best placed to decide when and how to use the energy they generate).

It's not revolutionary, but it's a step in the right direction. As new technology becomes more commonplace these types of rule changes are important to regulate the market effectively.

Unfortunately the bigger issue, highlighted in recent AEMO advice to the Government, is that the energy market as a whole is not functioning properly. There is a significant risk of power cuts in South Australia and Victoria in the coming years. Australia needs fundamental changes to correct the failing energy market.

The AEMC has a consultation on the rule change, open until the end of October, if you're keen to give them your thoughts.