The AEMC have recently released their final report succinctly titled Redefining roles and responsibilities for power system and market operations in a high CER future: Final advice to Ministers to progress M3/P5 priority of the National CER Roadmap (1). Try saying that ten times! Translation into normal speak is who does what and how, and who gets in trouble if the lights go out with lots of solar, EVs and batteries.  

In this article I start to unpack what it could mean for DNSPs (soon to be DSOs) and what things we (2) need to keep firmly in mind before the industry drown in the details of doing. 

Consistency, consistency, consistency 

James Clear sums it up best (3) “You do not rise to the level of your goals. You fall to the level of your systems.” while this quote comes from a book on personal growth it rings exceptionally true for our first world energy system that caters to such a diverse range of customer, business and infrastructure where pursuit of individual desires quickly make us all worse off. Economists call this the tragedy of the commons.  

Device interoperability (another huge topic), interactions with customers (and their agents), interfaces with AEMO and the Transmission/Distribution connection point are merely the tip of the iceberg for what requires consistency not only at a philosophical level, but also a very detailed technical level. Device interoperability in particular is best described as a game of Whispers at a rock concert. 

We can either rise to our national aspiration of revolutionising the Australian energy system and showing the world how to do it well or we can get lost in the forest without ever seeing a tree (probably because we’re all in the dark due to the lights going out). 

 DSO Regulation 

There’s a lot to say on this one and many unknowns, but essentially what the AEMC means by this is how do we create a balanced incentive framework so that DNSPs make decisions that result in the right mix of  building more poles and wires and optimising what’s already there by leveraging the flexibility that is a unique characteristic of CER.  

A lot is riding on getting the right combination of signals, incentives, checks and balances in place whilst keeping up with the pace of change. Not an easy task and we all need to lean-in to make it as sensible and practicable as possible. 

The last thing I’ll say on this is some words from the late Charlie Munger who said (4) “show me the incentive and I’ll show you the outcome”, this is incredibly true of regulated monopolies where the ”shape” of regulations play a huge role in the way DSOs will view/think/do things and other ways of thinking that fall outside these boundaries are generally verboten or subject to arduous (understandably so) ringfencing scrutiny and processes. 

The outcomes of the AEMC’s regulation review in 2026 will be an important vehicle to continue to get the balance right for a future with more flexible demand.  

 This is a team sport, not an individual sprint 

The size of the ambition in the report is constrained only by how well we as Australians (5) can work together to make it happen. One specific issue I want to call out is the historical friction between Retailers and Networks. These squabbles must take backseat to the national interest.  

This is not a zero-sum game and the success of the DSOs means success for all Australians and all of industry alongside them.  

The ENA and the AEC have begun the task to break down these cultural barriers, but there’s still more work to be done. This collaboration requires a concerted effort from everyone, regardless of where they come from, to think about how we can all support outcomes for Team Australia . 

I also want to give a special shout out to the teams at AEMC and AEMO on bringing together this huge piece of work with so many stakeholders to such a sensible place. As a fellow professional cat-herder I stand in awe of this achievement. 

This year has been a lot for a lot of reasons so I wish everyone a safe and joyful summer break with loves ones as we get ready to bring our best selves for 2026 and beyond.  

__________________________________________________________________________________________________________________________________

(1) Redefining roles and responsibilities for power system and market operations in a high CER future: Final advice to Ministers to progress M3/P5 priority of the National CER Roadmap
(2) The royal “we” as in all Australians, I’ll use this a lot
(3) From Atomic Habits,  a great book that is a must-read over the Christmas break
(4) Legendary co-founder of Berkshire Hathaway and all-round wise guy
(5) #TeamAustralia