Australian electricity and gas markets – March 2024 Update

In our March update, we take a look at the latest rule changes and market updates affecting participants in the Australian electricity and gas markets.

What you need to do:

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

National Electricity Rules

On 7 March 2024, the Australian Energy Market Commission (AEMC) released its final determination and final rule, on its improving the workability of the feedback loop rule change. The rule change has effect from 14 March 2024 and operates to: 

• enable the Australian Energy Market Operator (AEMO) to assess the feedback loop against the most recent Optimal Development Path (ODP);
• define timeframes in which AEMO must complete its feedback loop assessment; and
• allow Transmission Network Service Providers (TNSPs) to undertake feedback loop assessment concurrently within a Contingent Project Application (CPA). 

Also on 7 March 2024, the AEMC published its draft determination and draft rule as part of its enhancing investment certainty in the R1 process rule change. The draft rule applies to the pre-connection registered data (R1) process and operates to:

• allow generators to request written justification from AEMO and network service providers (NSPs) for additional modelling requests;
• require AEMO and NSPs to issue notifications upon commencement and conclusion of the R1 process; and
• streamline the process of revising Generator Performance Standards (GPS) during R1 process renegotiation. 

The AEMC is seeking submissions on the draft determination and draft rule by 18 April 2024. 

On 14 March 2024, the AEMC commenced its:

• providing flexibility in the allocation of interconnector costs rule change, releasing a consultation paper. The rule change seeks to give statutory effect to inter-governmental agreements on cost allocation within cross-border transmission projects. Stakeholders are invited to make submissions on the consultation paper by 11 April 2024; and
• accelerating smart meter deployment rule change under the fast-track process. This rule change seeks to modify the National Electricity Rules (NER) to streamline the smart meter installation process, improve consumer protections and provide a regulatory framework under which metering businesses can share power quality data with Distribution Network Service Providers (DNSPs). The AEMC expects to publish a draft determination in April. Stakeholders will have an opportunity to provide feedback following publication. 

On 21 March 2024, the AEMC published a final determination and final rule, on its sharing concessional finance benefits with consumers rule change. The rule change aims to share the benefits of concessional finance provided to NSPs with consumers in the form of lower network charges. Specifically, it enables NSPs to agree with the government funding body (GFB) to:

• pass through concessional financing benefits to transmission and distribution network users; and
• reduce the value of specified assets in the relevant register. 

Also on 21 March 2024, the AEMC finalised its accommodating financeability in the regulatory framework rule change, publishing a final determination and final rule. This rule aims to address challenges TNSPs may have in financing Integrated System Plan (ISP) projects. Specifically, the rule

• enables a TNSP to submit a financeability request to the Australian Energy Regulator (AER) for each stage of an actionable ISP project; and
• requires the AER to adjust the TNSP's cashflows if it determines that the TNSP has a financeability issue. 

TNSPs can apply for a financeability assessment from the commencement of the final rule on 29 March 2024.

Also on 21 March 2024, the AEMC finalised its enhancing reserve information (formerly Operating reserves) information rule change, publishing a final determination and final rule. The AEMC made a determination not to implement an operating reserve market, instead opting for a more preferable final rule that will increase the transparency of energy availability across the national electricity market. AEMO will now be required to publish the following information on a daily basis: 

• state of charge; 
• energy constraints by region and generation type; and
• maximum storage capacity. 

National Energy Retail Rules

On 14 March 2024, the AEMC commenced its accelerating smart meter deployment rule change under the fast-track process. In addition to modifications to the NER (see above), this rule change seeks to modify the National Energy Retail Rules (NERR) to: 

• improve the smart meter installation, testing, and inspection processes; and 
• provide consumer protections to consumers when receiving a smart meters. 

The AEMC expects to publish its draft determination in April. 

Other Updates 

The AER is seeking feedback and consultation on: 

• minor amendments to the regulatory guide for gas pipelines by 5 April 2024; 
• its draft compliance produces and guidelines by 19 April 2024;
• its Enhanced Wholesale Market Monitoring and Reporting Guideline issues paper by 23 April 2024; and
• its proposal to amend the AER Guidelines to include an emissions reduction objective by 26 April 2024. 

On 21 March 2024, the AEMO published its 2024 Gas Statement of Opportunities report. The report forecasts the adequacy of gas supplies in central and eastern Australia and aims to provide information to assist registered participants and other persons in making informed decisions about investment in the East Coast Gas Market. For more information see here.

Authors: Dale Gill, Partner; Andre Dauwalder, Counsel; Alexandria Brown, Lawyer; Murray Rissik, Graduate; Ethan Low, Paralegal.