Community-scale energy solutions encouraged by AEMO report

Community Power Agency has welcomed the Australian Energy Market Operator’s (AEMO) engagement with distribution network service providers (DNSPs) as a much-needed development in national energy planning — one that could unlock more community-scale energy solutions and build social licence in the shift to renewable energy.

“Although large-scale renewable developments, and the transmission network connecting them, are critical in the shift to renewables, we’re pleased to see AEMO now actively considering how the distribution network can also be part of the solution,” said Kim Mallee, Director of Community Power Agency.

AEMO’s Draft 2025 Electricity Network Options Report acknowledges that past planning efforts have primarily focused on consumer energy uptake alongside large-scale generation and transmission infrastructure. The report also notes that some of these large-scale developments have encountered social licence challenges.

“To date, the regulatory environment has favoured utility-scale developments. That has left community-scale projects in a kind of policy ‘no man’s land’, despite their proven benefits and strong local support.”

A targeted strategy to integrate distribution networks into AEMO’s Integrated Systems Plan (ISP) planning is said to open up new pathways for small to mid-scale renewable energy projects, typically sized between 1–10 MW. These projects are said to be well suited as community-owned or community-led initiatives, offering a ‘win-win’: they accelerate the rollout of renewable energy while enabling community participation, delivering tangible benefits to communities and strengthening social licence outcomes.

“Community-scale projects on the distribution network are often easily integrated into local landscapes, have close ties to the communities they serve and offer genuine opportunities for public participation and shared benefits,” Mallee said.

“We would love to see more projects like the community-owned 4.1 MW Hepburn Wind Farm and 1.8 MW Goulburn Solar Farm. And innovative models like the 1.2 MW Haystacks Solar Garden in the Riverina, where households locked out of rooftop solar can purchase a ‘solar garden plot’ and receive credits on their electricity bills, making solar more accessible to renters and apartment dwellers.

“These community-scale projects on the distribution network are sized in a way that invites participation, builds trust and delivers lasting local benefits. They prove that when communities are part of the solution, support soars and the shift to renewables becomes something people want to be part of,” Mallee said. “By expanding the focus to include both transmission and distribution networks, AEMO is helping to unlock a wider range of solutions that help to drive a fairer and faster energy transformation — and ultimately, a cheaper one too.”

Community energy groups are also highly motivated to participate in ‘non-network’ energy solutions that can help to increase the hosting capacity and stability of the distribution network, such as energy efficiency, demand response, virtual power plant and community battery programs.

Community Power Agency advocates for an energy-planning approach that enables people to participate in and benefit from the shift to renewable energy. It said utilisation of the distribution network provides a huge opportunity to do just that.

Image credit: iStock.com/JONGHO SHIN