The ACCC has issued a draft determination proposing to grant authorisation with a condition for five years to Energy Networks Australia, Synergy, and other specified parties to allow for the procurement and implementation of a national 'public key infrastructure' service (PKI).
The PKI service would manage secure communication between consumer energy resources (CER) and parties in the energy grid. Examples of CER include rooftop solar cells, batteries, and electric vehicles.
"This public key infrastructure service will enable distribution network service providers to remotely limit or prevent electricity export into the grid by consumer energy resources in times of significant excess production, known as an 'emergency backstop' mechanism," ACCC Commissioner Dr Philip Williams said.
Where power exports from CER are high and general energy consumption is low, there are risks to electricity grid stability and the potential for localised or wider blackouts to occur.
"While several state and territory governments have already implemented emergency backstop mechanisms, this service would give effect to a singular national approach to managing CER devices via communication protocols to avoid risks to electricity network system overload," Dr Williams said.
Currently, each distribution network service provider is responsible for procuring its own PKI solution for emergency backstop. Under the proposed conduct, however, providers could choose to utilise a national PKI delivered by a single provider.
The creation of a national entity to manage PKI for CER for emergency backstop is reflective of a national reform priority agreed to by federal and state/territory governments in 2024.
"We understand that a national regulatory framework for CER to set and enforce technical standards is being established as part of the national CER Roadmap and that whilst this is a more appropriate avenue for regulatory oversight of CER, we understand the current urgency around emergency backstop requirements," Dr Williams said.
"We are satisfied the proposed conduct is likely to result in a public benefit that would outweigh any potential public detriment to Australian consumers."
"Prior to making our final determination, however, we will be seeking further views on a number of potential public benefits and detriments," Dr Williams said.
The ACCC considers that the proposed conduct is likely to result in public benefits in the form of interoperability, cost savings for distribution networks, lower costs and complexity for manufacturers and installers, and increased consumer choice and device mobility.
However, the proposed conduct is likely to reduce competition for the acquisition and supply of public key infrastructure services. As it also has the potential to result in public detriment due to a lack of formal external oversight, the ACCC is proposing a condition requiring regular reporting of NEPKI's operations.
While there is some benefit in the proposed conduct enabling the public key infrastructure solution to expand to future use cases autonomously, it also has the potential to result in public detriment. To mitigate this, the ACCC is considering whether to limit authorisation to the 'initial use case' (i.e. solar cell and battery energy storage system orchestration via CSIP-AUS for emergency backstop and dynamic operating envelopes).
The ACCC has also granted interim authorisation to enable Energy Networks Australia and Synergy to carry out the initial three phases of activity while the ACCC considers the substantive application.
Submissions to the ACCC can be made by 2 June 2025. More information can be found on the ACCC's public register here.
Background
Energy Networks Australia is a national industry body representing electricity transmission and distribution network providers (DNSPs) and gas distribution network providers in all States and Territories.
Synergy is a Western Australian state-owned corporation that has electricity generation assets in WA and retails electricity and gas in WA. Sythenergy holds responsibilities around connection of CER to the grid.
PKI is a cybersecurity technology that uses digital 'certificates' installed in devices (such as solar inverters) to authenticate them and encrypt communications with them and is carried out over the internet. Distribution network service providers will utilise the national PKI to communicate with devices to remotely limit or prevent devices' electricity export into the grid in times of significant excess production (known as an 'emergency backstop' mechanism); rather than each network procuring individual, bespoke solutions for PKI.
The proposed conduct seeks to give effect to a national reform priority that was agreed to in 2024 by the Australian, state and territory governments in their 'National CER Roadmap'. The Roadmap states that a national reform priority is to establish a secure communication system for CER devices through establishing a national not-for-profit entity to manage PKI to operate and manage authentication of communications with CER for backstops.
The application for authorisation was lodged on 26 November 2024 and the ACCC received 22 submissions in relation to the application.
In the first phase of activity, there will be a collaborative evaluation of the responses to NEPKI's request for tenders for PKI services.
In the second phase, NEPKI will enter a service deed with a selected PKI service provider for the design, build and operation of PKI and related services. In the third phase, the PKI service deed will be delivered, beginning with the design and build of the PKI.
Finally, in phase four, the operational delivery of PKI services by NEPKI to PKI consumers will 'go live' for a term of up to five years.
A final determination is expected to be made in July 2025, subject to any submissions and requests from interested parties for a pre-decision conference.
