{"data":{"id":"sbm3939de0733cef5028874c","short_id":24,"created":"2025-11-21T00:17:00.723Z","space_id":"spc38bf5a4130666a5ccd765","project_id":"prj38bdad552e555e1c7f990","org_id":"org20ee740c8b3c21feb3566","content":{"zovp5q48":"Nexa Advisory","do-you-agree-to_8cb784":"yes_i_agree","upload-a-submiss_9dbd27":"fil39c9e8dd630c20f9446b5"},"is_topic":false,"title":null,"count_replies":0,"closed":false,"reply_to_id":null,"last_activity":null,"reactions":{},"_files":{"fil39c9e8dd630c20f9446b5":{"id":"fil39c9e8dd630c20f9446b5","bucket":"files-au-climate","remote_path":"climate-au/p/prj38bdad552e555e1c7f990/submission/spc38bf5a4130666a5ccd765/Nexa_Advisory_submission_DCCEEW_Solar_Sharer_Offer_211125_Redacted.9ef70deb.pdf","url":"https://storage.googleapis.com/files-au-climate/climate-au/p/prj38bdad552e555e1c7f990/submission/spc38bf5a4130666a5ccd765/Nexa_Advisory_submission_DCCEEW_Solar_Sharer_Offer_211125_Redacted.9ef70deb.pdf","filename":"Nexa Advisory submission - DCCEEW Solar Sharer Offer 211125_Redacted.pdf","transcribed":"21 November 2025\n\nRetail Markets Section\nDepartment of Climate Change, Energy, the Environment and Water (DCCEEW)\nCanberra ACT 2600\n\nLodged electronically\n\nSubmission to Solar Sharer Offer consultation\n\nNexa Advisory welcomes the opportunity to contribute to DCCEEW’s Solar Sharer Offer (SSO)\nConsultation Paper – following our engagement on the Reforms to the Default Market Offer\n(DMO) Consultation Paper.\n\nNexa is an advisory firm with an unwavering focus to accelerate the clean energy transition in a way that provides secure, reliable, and affordable power for consumers of all types. Nexa\nAdvisory is a team of experienced specialists in the energy market, policy and regulation design, stakeholder engagement, and advocacy. We work with public and private clients including renewable energy developers, investors and climate impact philanthropists to help them get\nAustralia’s clean energy transition done.\nWe support the SSO in principle as a strategic and innovative offering which aligns with government policy and supports broader uptake and equity concerns. Requiring retailers to offer the SSO as a standing offer in DMO jurisdictions provides clear benefit to those least able to take advantage of market offers. However, the implementation must be carefully considered and supported by strong consumer protections to avoid unintended consequences.\n\nThe recent Cheaper Home Batteries scheme has seen successful uptake showing the willingness of Australians to take part in the energy transition. This scheme and similar initiatives are rapidly expanding the pool of consumers with flexible energy assets. The SSO can complement this trend by also engaging consumers without their own CER to contribute to demand-side flexibility.\n\nHowever, further reforms are needed to enable innovative consumer energy offerings. Namely, this includes addressing the need for cost-reflective network tariffs and removing the capital expenditure bias of DNSPs.\n\nKey points\n• We support in principle the introduction of the SSO as a standing offer in DMO\njurisdictions as an equity-enhancing, demand-side oriented reform.\n• The SSO design and AER implementation should be carefully considered to and\nsupported by strong consumer protections to avoid unintended consequences.\n• The SSO design and AER implementation should explicitly linked to cost-reflective\nnetwork tariff reforms, rather than treated in isolation.\n• DCCEEW should progress complementary reforms to DNSP incentive frameworks,\nincluding totex-style arrangements and stronger ring-fencing, to ensure CER value is\nrealised through competitive, consumer-led solutions rather than new waves of\nregulated capex.\n\nDCCEEW Solar Sharer Offer – Consultation Paper Copyright Nexa Advisory | 1\n• DCCEEW should utilise the SSO to better understand consumer ability and\nwillingness to shift load and feed these lessons into the AEMC’s consumer pricing\nreview and the National CER Roadmap.\n\nEfficient pricing, reforming network tariffs and addressing the capex bias\n\nDCCEEW has rightly pointed out that innovation of consumer energy offerings is already happening. We note that while innovative retailers and energy service providers have adopted innovative offers - innovation continues to fall short at the network charges level.\n\nDCCEEW must support broader reforms to network tariff design alongside the SSO standing offer to deliver its intended benefits. The SSO should be underpinned by network tariffs that provide cost-reflectivity - lower daytime charges and stronger peak signals - so retailers are not forced to recover high fixed and peak network costs in ways that dilute or distort the value of the zero-cost window. DCCEEW should work with the AER and AEMC to ensure network tariffs evolve in step with the SSO.\n\nNetwork charges are already the single largest cost line on an electricity bill, averaging about 38 per cent of the DMO across distribution businesses, and climbing as high as 46 per cent in some regions1. Because these network costs are socialised, every customer – whether they own CER or not - stands to benefit from smarter, more flexible networks. We have recently discussed that CER could avoid around $8 billion in future generation and storage investment and a further $11 billion in network outlays by 2040, savings that would flow directly into lower network tariffs and bills for all consumers2.\n\nThe current regulatory framework, incentive structure, and network tariff setting process for\nDNSPs have given rise to Regulated Asset Base (RAB) growth rather than with customers in mind. To address this and ensure competitive outcomes which cater to broad consumer needs, the regulatory framework must uphold ring-fencing and remove information asymmetry which currently exists due to lacking network data transparency. This must happen before the tariff setting process is reformed.\n\nDNSPs favour capital investment solutions that enhance the RAB and earn regulated revenue - over non-network solutions, such as purchasing a service (operational cost), which are likely to be more dynamic and flexible in the CER-driven future energy system – resulting in a lower overall cost for the system and consumers.\n\nProperly designed tariffs, coupled with effective competition, can significantly mitigate the need for extensive future network investments. Currently, network utilisation stands at approximately 47 per cent, highlighting an urgent need for reform to enhance asset productivity and manage escalating costs which are passed on to consumers3.\n\nAchieving broader network tariff reform would enable cost-reflective tariff arrangements to be adopted by all DNSPs and become a part of regular Tariff Structure Statements (TSSs) offered\n\n1\nAER, 2025-26 Default Market Offer Final Determination, May 2025\n2\nNexa Advisory, Empowering Consumer Energy, 23 June 2025\n3\nIbid\n\nDCCEEW Solar Sharer Offer – Consultation Paper Copyright Nexa Advisory | 2\nby DNSPs. We consider that this should leverage and extend the learnings already seen from network tariff trials, with a view to longer-term reform, mitigating the need for ad hoc grabs and trial tariffs such as that included in Ausgrid’s proposal for Community Power Network (CPN).\nThe CPN trial includes a BESS network tariff which will not be offered to competitively-provided\nBESS either within or outside the trial areas, which introduces a form of price discrimination.4\n\nDCCEEW must be mindful to consider opportunities to minimise gold-plating by DNSPs by pursuing reforms to the incentive scheme for DNSPs, including the exploration of the totex model. Ultimately, moving toward outcome-based or ‘totex’ incentive models, and requiring\nDNSPs to consider non-network alternatives on equal footing, will help remove the built-in preference towards capex and deliver more efficient outcomes.\n\nWe are concerned that the recent NSW Distribution System Plan (DSP) by Ausgrid, Endeavour\nEnergy and Essential Energy reflects DNSPs pursuing an expanded role in the consumer energy transition by positioning distribution-connected storage and DNSP-led orchestration of consumer energy assets as the primary solutions, while treating cost-reflective network and retail tariffs as peripheral. The DSP acknowledges that existing regulatory and tariff frameworks are a barrier to unlocking value but largely characterises reforms to these frameworks as necessary to enable greater deployment and favourable treatment of DNSP-owned, distribution-connected storage. By contrast, where it discusses consumer-owned assets, it emphasises DNSPs’ role in ‘coordinating’ and ‘orchestrating’ CER, normalising a distribution system operator role rather than prioritising cost-reflective tariffs, open data and neutral market access.\n\nBy prioritising cost-reflective tariff reform, data transparency and competitive procurement of services alongside the SSO, DCCEEW can support competitive, consumer-centric outcomes and avoid reinforcing DNSP over-reach, gold-plating and direct control of consumer assets;\nDNSP-led assets and controls should be treated as last-resort options.\n\nA key objective of the SSO should be enabling innovative and consumer-centric market offers and testing demand flexibility\nWe recommend that DCCEEW explicitly articulate that one objective of the SSO is to underpin and enable innovative, consumer-centric market offers and to generate evidence on consumers’ willingness and ability to shift load. Embedding this within the policy intent will ensure that the SSO is an anchor to the further development of innovative, consumer-centric market offers which provide price signals to enable broader consumer participation in the energy market.\n\nThere is already a vibrant - though nascent - ecosystem of innovative retailers, energy service providers and aggregators which already competitively deliver energy products and services.\nFor example:\n• Free power period (FPP) market offers – including from AGL, OVO, Red Energy, Synergy\nand Globird.\n\n4\nNexa Advisory, Submission on Ausgrid’s Community Power Network Trial Waiver Application, 17\nSeptember 2025\n\nDCCEEW Solar Sharer Offer – Consultation Paper Copyright Nexa Advisory | 3\n• Powershop, Amber Electric, and Flow Power – which bundle wholesale‑linked pricing\nwith real‑time digital engagement tools. Flow Power in particular uses\ndemand‑response signals which rewards customers for shifting load.\n• Virtual Power Plant (VPPs) operators and aggregators – including EnelX, Flow Power,\nTesla Energy, AGL, EnergyAustralia and Reposit Power, which have developed platforms\nfor orchestration (which will require transparent network data and market signals to\nensure they are responsively dispatched).\n• Electric vehicle charging providers such as Evie Networks, Ampol, NRMA, RACQ and\nEVX – which lead in the competitive rollout of public EVCI.\nTogether these examples demonstrate that product innovation is not the missing ingredient; rather, market and regulatory challenges are impeding growth of these businesses and consumer energy offerings.\n\nThe concept of using price signals to engage consumers in energy management is already proving effective in trials and market developments. For example, VPP programs have demonstrated that households with batteries can be coordinated to provide valuable grid services and shift load during peak times.\n\nUsing the SSO to leverage existing consumer enthusiasm for CER – including home batteries – while systematically testing willingness and ability to respond to time-varying prices will improve retailers’ understanding of consumer behaviour. This, in turn, can drive the development of consumer-centric offerings that support an efficient market and better consumer outcomes, rather than relying on DNSP-led network augmentation and blunt control of consumer assets.\n\nSSO as a catalyst for broader market reform\n\nAlthough the initial implementation of the SSO as a standing offer in the DMO will only represent a particular segment of the retail market, by supporting ongoing development of innovative market offers, this program can help retailers, government and market bodies better understand flexibility. This should be used to inform broader workstreams including the AEMC’s consumer pricing review5 and DCCEEW’s National CER Roadmap.\n\nThe AEMC has highlighted that retail pricing frameworks must evolve accordingly to reflect consumer energy uptake and the shift towards a two-way system. The SSO can provide a concrete example of such an evolution – providing in-market evidence of time-dependent and cost-reflective tariffs and associated shifts in consumer behaviour once adopted.\n\nAdditionally, the SSO directly supports several elements of the National CER Roadmap.\nNotably, it addresses the call to develop new tariff structures that provide equitable outcomes and incentives for CER uptake. We encourage DCCEEW to explicitly monitor and evaluate the\nSSO’s impact as part of National CER Roadmap workstreams. For example, metrics like peak demand reduction, increased midday consumption, or number of non-solar households taking up the offer could be reported as indicators of progress on how innovative retail offers can contribute to efficient system utilisation and ultimately consumer outcomes.\n\n5\nAEMC, The pricing review: Electricity pricing for a consumer-driven future\n\nDCCEEW Solar Sharer Offer – Consultation Paper Copyright Nexa Advisory | 4\nWe recommend that DCCEEW and the AER publish a simple SSO evaluation framework ahead of implementation, including clear metrics and outcomes to be measured, and a commitment to refine SSO parameters in light of observed impacts on demand, bills and retailer behaviour.\nThis should inform a review of the SSO as part of the ongoing annual DMO process by the AER.\n\nEnsuring transparency and competitive neutrality\n\nAs NSW DNSPs’ recent DSP illustrates, networks are seeking to expand their role in CER integration, often through DNSP-owned community batteries, EV charging and other contestable assets, supported by bespoke tariffs and backstop mechanisms. To ensure the\nSSO and related reforms do not entrench this trajectory, DCCEEW should:\n\n• reaffirm the importance of strong ring-fencing and competitive neutrality;\n• promote transparent, standardised access to network data so third-party providers can\noffer competitive solutions; and\n• encourage DNSPs to procure flexibility and CER services competitively, rather than\ndefaulting to regulated ownership wherever network benefits are identified.\n\nConcluding remarks\n\nNexa Advisory appreciates the Department’s forward-thinking approach in considering the\nSolar Sharer Offer as part of the retail market framework. We believe the SSO can deliver meaningful benefits for consumers – lower bills for those who need relief, and a more efficient grid for everyone. By implementing the SSO and addressing other structural reforms including network tariffs and DNSP incentive arrangements, DCCEEW can ensure that all consumers - especially those on the SSO standing offer - benefit from a more dynamic and equitable energy market.\n\nThank you for the opportunity to provide input into the Consultation Paper. We welcome the opportunity to further discuss any aspect of our submission - please contact either myself\nor Jordan Ferrari, Director - Policy and Analysis,\n.\n\nYours Sincerely,\n\nStephanie Bashir\nCEO and Principal\nNexa Advisory\n\nDCCEEW Solar Sharer Offer – Consultation Paper Copyright Nexa Advisory | 5","size":140546,"redacted":[],"meta":{"name":"Nexa_Advisory_submission_DCCEEW_Solar_Sharer_Offer_211125_Redacted.9ef70deb.pdf","local_path":"files/tdNO7csnN4Gxz9eiPQE4nN93.pdf","transcribe_error":null,"transcribe_status":null},"config":{}}}}}