Guest contributor: James Brown, Senior Manager Enterprise Innovation, SA Power Networks

The interoperability gap: $billions of potential CER benefits lost in translation

The energy transition has, until now, predominantly been a supply-side story.

This makes sense – it’s easy to imagine decades old coal and gas generators being replaced with wind turbines and solar farms. Meanwhile, customers have taken charge by investing in Consumer Energy Resources (CER) – solar, batteries, electric vehicles and other smart appliances. Studies show that the flexible operation of these resources could reduce the cost of the transition by up to $45bn between now and 2050[1], through avoided network and supply-side investment.

No matter the study you read, the size of the prize is absolutely worth pursuing.

This full benefit will only be unlocked if CER flexibly responds to:

• Customer needs by optimising around their energy tariff in response to their preferences.
• Distribution network needs including keeping operation within the ‘guard rails’ of the network – set by dynamic operating envelopes (DOEs) or responding to network constraints procured in flexibility markets.
• Broader energy system needs including the wholesale market and other market services through participation in Virtual Power Plants (VPPs).

Making it real
Imagine a future where you purchase a Home Energy Management System (HEMS) from JB Hi-Fi, plug it in and it automatically discovers and connects to your smart solar and battery system, hot water system and smart EV charger. Within the HEMS app you are presented with retail offers that reward you for supporting your local network, wholesale market and broader system security, with the ability to set your level of autonomy and opt-out at any time.

The HEMS then learns your usage patterns over time and manages your smart CER to save you money on your electricity tariff. Additionally, the HEMS will respond to network and retailer signals that might delay EV charging a couple of hours or discharge your battery to reduce demand on the network or respond to a lack of supply in the wholesale market. Not only will you be rewarded for your contribution directly, but you will also be contributing to reducing the cost of the transition for all customers.

Bottom line: At any given time, you can rest assured that you’re being prompted to get the cheapest energy on offer, within the constraints of the technology you have, and your personal preferences.

The technical reality behind this peace of mind
Interoperability is required to enable this frictionless, ‘plug and play’ customer experience. Think of interoperability as the common language for CER to communicate and co-ordinate, codified in standards, tested and verified in labs in pursuit of making the complex invisible to ensure CER ‘just works’ for the benefit of customers.

The interoperability gap
The problem is, we lack ubiquitous interoperability standards today.

CER which is currently on the market supports a mixture of proprietary and partially standardised interfaces. This doesn’t enable co-ordination behind-the-meter and locks specific products out of VPPs and DNSP offerings. Importantly, none of this is communicated to the customer at time of sale.

This issue has become highly evident in the SA Power Networks Energy Masters program[2]. Energy Masters is an ARENA funded, SA Government and industry cross collaboration project which aims to electrify and install HEMS in 500 homes in South Australia to test the benefits and maturity of demand flexibility technology. Whilst the HEMS technology partner developed integrations to over 40 solar and battery inverter models and many more smart appliances, more than 50% of the approximately 2,000 South Australians who expressed an interest in the trial were ineligible due to their equipment being non-interoperable[3]. Lack of standardised interoperability also makes HEMS significantly more difficult (and costly) to install on site.

The solution
There are already many industry and government led activities underway to address the interoperability gap.

The first major industry led effort was the development of CSIP-AUS – the now de-facto language to communicate DNSP dynamic operating envelopes to customer sites.

The next challenge is to develop the communication standards to enable interoperability in the home, behind-the-meter. Through the National CER Roadmap[4], the Energy and Climate Change Ministerial Council (Federal and State Energy Ministers) have outlined a pathway to full behind-the-meter CER interoperability by 2030, with implementation led by the Department for Climate Change, Energy, Environment and Water (DCCEEW). This includes:

• Stream T1: Development of behind-the meter standards, including the introduction of AS5438 for behind-the-meter interoperability.
• Stream T2: The establishment of a National CER Technical Regulator to oversee the development, evolution and enforcement of technical standards.
• Stream T3 and T5: Cyber security of CER communications through new standards and the Establishment of National Energy Public Key Infrastructure (NEPKI)[5].

Every day in Australia approximately 500 new rooftop solar systems, 700 home battery systems and 370 solar and heap pump hot water systems are installed[6] plus there are approximately 510 new EVs on the road, all without common interoperability capabilities.

This means it’s critical that the CER Roadmap activities are advanced at pace and in close coordination with DCCEEW and industry, lest we increasingly lose out on a lower cost energy transition for everyone.

The end game
Customers are unique but their universal needs are simple: By and large, they want to meet their individual needs and preferences in the cheapest way possible. The market will be increasingly complex, but manual effort and decision-making for customers to achieve that goal, can be vastly simplified.

[1] https://www.aemc.gov.au/energeia-finds-cer-flexibility-could-deliver-45b-benefits-2050
[2] https://www.saenergymasters.com.au/
[3] This, and many other great insights, can be found in the latest Energy Masters Lesson’s Learnt Report.
[4] https://www.energy.gov.au/sites/default/files/2025-08/National%20Consumer%20Energy%20Resources%20%28CER%29%20Roadmap%20Implementation%20Plan%20Update%20August%202025.pdf
[5] https://www.nepki.com.au/
[6] Derived from Clean Energy Regulator postcode data https://cer.gov.au/markets/reports-and-data/small-scale-installation-postcode-data