What you need to do:
Stakeholders should note the legislative reforms that have been made, new reports that have been published and any deadlines for making submissions noted below.
National Electricity Rules
On 1 December 2021, the AEMC published a draft rule that grants AEMO more flexibility to update the short-term projected assessment of system adequacy (ST PASA) so that it remains fit for purpose as the market develops. Submissions to the draft determination and draft rule are open until 10 February 2022 and the AEMC will publish a final determination in March 2022. More information can be found here.
On 2 December 2021, the AEMC announced:
- a final rule change in relation to Integrating energy storage systems into the NEM, which makes it easier and more attractive for batteries and hybrid systems to enter the market. The final changes are also intended to help ensure that the energy sector keeps pace with new technologies and supports innovation. Importantly, this reform does not move the goal posts on network charges, meaning that energy storage participants will continue to negotiate transmission services and charges as they currently do. The operative provisions of the rule will commence on 3 June 2024. For more information on this rule change see here;
- a final rule change relating to compensation for market participants affected by AEMO intervention events that trigger intervention pricing. The final rule incorporates frequency control ancillary services (FCAS) into the automatic compensation framework in clause 3.12.2 of the NER and amends the formula for calculating energy compensation for market customers with scheduled loads. The main elements of the final rule will commence on 1 August 2022. For more information on this rule change see here;
- extensions of time for publication of the draft determinations for the Synchronous services markets and Capacity commitment mechanism rule changes to 30 June 2022. For more information on these rule changes, see here and here;
- an extension of time for publication of the final determination on the Primary frequency response incentive arrangement rule change to 7 July 2022. The extensions were made in response to the complexity of the decisions, need for more detailed designs in relation to some aspects of the work, and stakeholder requests for additional time given the number of other rule changes and reform projects currently underway in the sector. For more information on this rule change see here; and
- an extension of time for the publication of a draft determination on the Material change in network infrastructure project costs rule change to 28 April 2022. This extension was made due to the complexity of issues involved and to progress the rule change request in parallel with the Transmission planning and investment review, which is examining closely related matters. For more information on this rule change see here.
On 16 December 2021, the AEMC:
- published a consultation paper in relation to the proposed rule change for Improving consultation procedures in the Rules, which relates to the NER, NGR and NERR. Stakeholders' submissions regarding the consultation paper and proposed rule change are due by 3 February 2022. For more information see here;
- published a draft rule determination relating to the Consultation on the governance of distributed energy resources (DER) technical standards. The draft rule sets out five distinct roles for the AEMC to perform to realise the benefits from DER technical standards and integration. More information on this draft rule can be found here; and
- the Reliability Panel released the 2021 Annual market performance update which forms part of the Annual Market Performance Review and provides initial insights and analysis on the reliability, security and safety of the power system over the period from 1 July 2020 to 30 June 2021. The full market update can be found here.
National Energy Retail Rules
No AEMC determinations relevant to the NERR were published in December.
Stakeholder feedback is sought though in relation to the Improving consultation procedures in the Rules rule change discussed above, which also relate to the NERR.
National Gas Rules
No AEMC determinations relevant to the NGR were published in December.
Stakeholder feedback is sought though in relation to the Improving consultation procedures in the Rules rule change discussed above, which also relate to the NGR.
Other updates
On 10 December 2021, AEMO published the Draft 2022 Integrated System Plan, which nominates the "Step Change" scenario as the most likely future scenario. Under this scenario, the NEM will operate without coal generation from 2043, and requires a substantial increase of investment in battery, pumped-hydro storage, hydrogen or gas-fired generation for peak demand. A copy of the draft 2022 ISP can be found here.
On 17 December 2021, National Cabinet endorsed the Post 2025 DER Implementation Plan and has instructed the ESB to move forward with the three-year reform road map. More information can be found here.
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Authors: Paul Newman, Partner; Andre Dauwalder, Senior Associate.