Enable networks to invest in electrification

The energy sector's planning and response to electric vehicle uptake is key to reducing distribution grid costs for users and taxpayers. New distribution infrastructure will be needed to support the transition to electric vehicles. Targeted and timely investment will be critical to strike the right balance between enabling electric vehicle uptake and convenient charging while avoiding gold-plating and unnecessary costs for customers.

As more electric vehicles are purchased, network businesses may be forced to make unexpected investments in distribution network infrastructure. Every five years, the AER determines network businesses' forecast revenue requirements. This includes the forecast investment needed to enable an expected number of electric vehicles. However, if the uptake of electric vehicles is greater than expected in an area of the network, the five-year revenue allowance may not provide appropriate investment flexibility to meet customer demand.

The AEMC should consider rule changes that allow network operators more flexibility in investment that enables electrification. Network businesses should minimise costs and disruptions over long-term planning horizons by aligning their plans to future risks and forecasting, in accordance with electric vehicle forecasts over the whole-of-asset lifecycle of networks.

Due to rapid adoption, AEMO does not have complete visibility of distributed energy assets. The Distributed Energy Resources Register, which is providing this coverage for stationary distributed energy resources, should be expanded to include charging of electric vehicles. All charging infrastructure should be included in the register to better understand locational charging patterns and facilitate efficient and targeted distribution grid investment.