Legal development

Australian electricity and gas markets – August 2023 update


    What you need to do

    Stakeholders should note the market updates below, and note any impacts on their compliance obligations.

    National Electricity Rules

    On 3 August 2023, the Australian Energy Market Commission (AEMC):

    • published a consultation paper and information sheet initiating a rule change request from the Australian Energy Market Operator (AEMO) proposing to clarify mandatory primary frequency response (PFR) obligations of scheduled bidirectional plant. The AEMC is seeking feedback on issues relating to the long-term provision of PFR and AEMO's proposed requirements for batteries to provide PFR when charging, discharging or enabled for market ancillary services. For more information see here;
    • published a consultation paper on AEMO's Integrating price-responsive resources into the NEM rule change request. The AEMC is seeking submissions on the need to integrate price-responsive resources into the NEM. Stakeholders are invited to make submissions on the paper until 14 September 2023; and
    • published a directions paper as part of the Operating reserve market rule change. The paper proposes to not recommend an operating reserve market, acknowledging that while such a market could improve the visibility on reserve levels, it would introduce additional costs without offering performance improvements. The AEMC is seeking written submissions on the directions paper. For more information see here

    On 10 August 2023, the AEMC released a draft determination and draft rule as part of the Enhancing community engagement in transmission building rule change. The draft rule seeks to enhance transmission service network providers (TNSPs)'s community engagement by: 

    • clarifying that TNSPs must engage with stakeholders who are reasonably expected to be affected by the development of the actionable Integrated System Plan (ISP) project, future ISP project, or projects within a Renewable Energy Zone stage;
    • clarifying that TNSPs are required to consult with local communities during the regulatory investment test for transmission (RIT-T) process; and
    • introducing community engagement expectations for TNSPs when engaging with local community stakeholders.

    The AEMC is inviting submissions on the draft determination and draft rule until 28 September 2023

    On 17 August 2023, the AEMC published a consultation paper on the Clean Energy Council (CEC)'s Enhancing investment certainty in the R1 process rule change request.

    For more information on the CEC's request, read our previous update here. The AEMC's paper seeks input on: 

    • current problems with the assessment of generator registration applications; 
    • the magnitude of the problems, including their effect on financing and the efficient completion and staging of generation projects; and  
    • the CEC’s proposed changes and whether there are alternative solutions. 

    Stakeholder submissions are invited until 28 September 2023

    On 17 August 2023 the AEMC made a final determination and final rule to remove the Australian Energy Regulator (AER)'s obligation to develop and update electricity consumption benchmarks. The AEMC has determined that removing this obligation will benefit consumers by providing the AER the ability to more agilely identify and respond to data needs. The final rule was effective from 17 August 2023. For more information see here

    On 24 August 2023, the AEMC released a directions paper and draft rule as part of the Improving security frameworks for the energy transition rule change. The AEMC's paper proposes a revised approach to its Operational Security Mechanism (OSM) rule change draft determination made in September 2022. Feedback on the directions paper and draft rule are being sought until 28 September 2023. The AEMC expects to publish a final determination later this year. 

    National Energy Retail Rules

    No retail rule change requests were initiated in August. No AEMC determinations relevant to the National Energy Retail Rules were published.

    National Gas Rules

    On 4 August 2023, AEMO commenced the first stage of consultation and published a consultation paper on the structure of gas participant fees. The matters for consultation are the determination of a Participant Fee structure to apply to gas markets, Pipeline Capacity Trading, and East Coast Gas System Reform Program from 1 July 2024. AEMO has ceased taking submissions on the consultation paper and will publish a draft report and determination on 22 September 2022. For more information see here

    Other Updates

    On 3 August 2023, the AER released a draft confidentiality guideline, draft cost allocation guideline, draft legal and functional separation guideline and draft guidance note to support the regulation of network infrastructure projects under the NSW Electricity Infrastructure Roadmap. These guidelines are intended to support the AER's function as a Regulator under the NSW Electricity Infrastructure Investment Act. For more information see here.    

    On 10 August 2023, the Energy Ministers agreed the terms of reference for a review of AEMO's ISP. The terms set out the purpose, scope, governance and process for the review, which aims to will determine the ideal scope, function, and form of a ‘supercharged’ ISP. For more information see here

    On 17 August 2023, AEMO published its 2023 Wholesale Electricity Market (WEM) Electricity Statement of Opportunities (ESOO) report. The WEM ESOO is an annual publication that identifies the investment in capacity from generation, storage, and demand side management needed to ensure a secure and reliable electricity supply for the South West Interconnected System over the coming 10 years. For more information see here.

    Finally, AEMO published its 2023 NEM Electricity Statement of Opportunities report. The NEM ESOO provides a reliability outlook for the NEM in the coming decade. Without urgent and sustained investment in new sources of electricity, there are significant risks to reliability. In order to prevent any delay likely to put reliability at risk over the coming decade, planned generation, storage and transmission, supported by government programs, must be delivered urgently.  

    Please click here to see our latest Energy Alerts, as part of our Energy Alert Series.

    Authors: Andre Dauwalder, Counsel; Nikita Summers, Graduate and Murray Rissik, Paralegal.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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