This submission responds to the Australian Energy Market Commission (AEMC) as part of an ongoing series of consultations reviewing electricity distribution network regulation.
It addresses how distribution network service providers (DNSPs) handle rapid, emerging changes across the distribution grid.
This is important and urgent due to the current deployment of Electric Vehicle Charging Infrastructure (EVCI).
Submission summary
Our submission balances two key realities:
- Leveraging network speed and capital: DNSPs are well-financed, highly capable, and motivated to move quickly. We actively encourage their investment in EVCI because their capital can bridge early deployment gaps and accelerate transport decarbonisation.
- Mitigating monopoly power: DNSPs also operate as regulated monopolies backed by a guaranteed asset base. If they are allowed to operate unchecked in adjacent competitive markets, they gain an unfair advantage that risks crowding out private investment, stifling innovation, and inflating long-term costs for consumers.
To resolve this, we recommend allowing DNSPs to build kerbside charging infrastructure, but not operating the retail side. Furthermore, DNSPs would then sell and transition asset ownership to private operators whenever an economic case for commercial viability exists.
Our proposed governance framework: The 6-stage lifecycle
To operationalise this position, Climateworks proposes a regulatory lifecycle in the National Electricity Rules:
- Identification: The DNSP identifies an apparent market failure (e.g. an uncommercial kerbside EV charging gap) and submits supporting evidence.
- Independent assessment: An accredited, unaffiliated evaluator verifies the deployment gap and tests for a net economic benefit.
- AER approval: The Australian Energy Regulator (AER) applies statutory criteria to grant a conditional, time-limited ring-fencing waiver for demonstrated market failures.
- Transparent reporting: The DNSP publishes public, digitally readable data detailing connection costs, processing times, asset utilisation and grid benefits.
- Periodic review: Scheduled re-assessments confirm whether the market failure persists.
- Competitive exit: Reaching a predefined market viability threshold triggers competitive divestment, asset transfer to private market operators and waiver expiry.
This allows network financing to jumpstart essential EV infrastructure immediately, while using independent oversight as well as exit triggers to protect competitive markets.