Storage is a critical technology for Victoria’s affordable transition to renewable energy. As part of our regulatory reset engagement program, we're seeking feedback on our proposed approach to integrate storage connecting to our networks through the Storage Integration Consultation Paper.

In the future when there is more renewable energy moving through our network, we’re going to need a lot more energy storage to make sure this power is available when we need it. That’s why we’re seeking feedback from our customers and stakeholders on our approach to storage as part of our 2026-2031 planning.

For this consultation, storage includes stand-alone batteries and any other devices which can consume, store, and release electricity on demand at the point of connection to the network (sometimes referred to as a battery energy storage system, or BESS). This paper doesn’t cover home and car batteries, which will be consulted on separately.

If located in the right areas, batteries and other methods of storage have the potential to provide network services to manage maximum or minimum demand.

Summary of our proposed package

The following diagram shows how we envisage operating windows, network support arrangements and network tariffs would be used to integrate storage onto our network.

Operating window

A high voltage distributed energy resource management system (HV DERMS), interfaces with a generation and/or storage customer’s systems that is connected to the high voltage network.

The HV DERMS provides a dynamic operating window by discontinuing, interrupting or limiting the quantity of electricity imported from or exported to the distribution system at any time. This could occur around planned or unplanned maintenance, repair or augmentation of the system, in the case of emergency or a variety of other circumstances.

While our networks don’t yet have an equivalent system for LV batteries, it’s anticipated in the near future.

Network support arrangements

Network support arrangements are key to obtaining the positive benefits of battery storage, as the conditions and payments can be location specific.

In our 2026-2031 regulatory proposal we plan to propose expenditure to improve network data visibility and enhance our ability to procure network services. This could include:

• improving our operational forecasting ability at the low voltage network level
• investing in an enhanced distribution energy resource management platform to improve partnerships, and
• investing in a flexibility procurement platform to integrate network constraint data and enable a more streamlined approach for bidding.

Connection charges

Under the AER guidelines, a customer’s contribution to connection costs is made up of a variety of costs including:

• Incremental Cost Customer Specific (ICCS) – the cost of connection services used solely by the connection applicant, such as augmentation and extension costs.
• Incremental Cost Shared Network (ICSN) – the average unit cost of upstream augmentation multiplied by the estimated peak coincident demand of the connection applicant, minus incremental revenue.
• Operating and Maintenance Costs (O&M) – accounted for either as an estimate of O&M costs arising from the connection assets; or removed from DUOS charges that component which recovers O&M costs.

We’re proposing that due to the imposition of operating windows on storage, ICSN should be assumed to be zero, which will significantly lower connection costs for a storage connection applicant. However, if applicants want to lessen future constraints, a higher connection charge to support network augmentation will be required.

Network tariff principles

We’re proposing dedicated network tariffs for storage due to the associated operating constraints which are not imposed on load connections.

Further details of our proposed network tariff principles are available in the full consultation paper (pages 13-22).