Australian electricity and gas markets - May 2022 update

What you need to do:

Stakeholders should note the new rules and reports published below, and note the deadlines for making submissions.

Rule Changes

National Electricity Rules

On 5 May 2022, the Australian Energy Market Commission (AEMC) released a consultation paper in relation to the Establishing revenue determinations for intending TNSPs rule change request .  The rule change request, initiated by Marinus Link Pty Ltd, seeks to enable the Australian Energy Regulator (AER) to establish a revenue determination for an intending transmission network service provider (TNSP).  The rule change request aims to increase revenue recovery certainty in order to enable intending TNSPs to make timely and efficient investment decisions to deliver transmission projects.  The AEMC have invited submissions to the consultation paper until 2 June 2022.

On 5 May 2022, the AEMC released a final rule and determination in response to the Updating Short Term PASA rule change request.  The final rule is designed to enable the Australian Energy Market Operator (AEMO) to more effectively incorporate variable renewable energy generation, distributed energy resources, virtual power plants and battery energy storage systems into the Short Term Projected Assessment of System Adequacy (ST PASA).  The final rule will provide AEMO with greater discretion in relation to the inputs, information requirements and information that is published in ST PASA and will require AEMO to publish generator availability information for each station and unit.  The operative provisions of the final rule will commence operation on 31 July 2025.

On 19 May 2022, the AEMC published its final rule and determination in relation to the AER reporting on market outcomes rule change request.  The final rule introduces a principles-based reporting framework for the Australian Energy Regulator (AER) to report on significant price outcomes.  The final rule will come into effect on 29 September 2022.

On 19 May 2022, the AEMC published a directions paper in relation to the Primary frequency response incentive arrangements rule change request.  This rule change request was submitted by AEMO in response to the observed degradation of frequency performance in the national electricity system.  In response to stakeholder feedback, the directions paper incorporates a revised approach to new incentive arrangements to encourage generation and load to assist with controlling power system frequency.  The AEMC have invited submissions on the directions paper until 16 June 2022.

On 26 May 2022, the AEMC released a draft rule and determination in relation to the Enhancing information on generator availability in MT PASA rule change.  The Medium Term Projected Assessment of System Adequacy (MT PASA) is published by AEMO and includes information reported by generators in relation to how many megawatts they could make available each day, with 36-month projections updated weekly (or more regularly if circumstances change).  The draft rule proposes to expand on existing MT PASA arrangements by requiring scheduled generators to also provide:

• "unit state" in the form of standardised reason codes that explain why a scheduled generating unit is or is not available; and
• "unit recall time" to indicate the period in which the plant could be made available under normal conditions after a period of unavailability.

The AEMC have invited submissions on the draft rule and determination until 7 July 2022.

On 26 May 2022, the AEMC released a consultation paper in relation to the Efficient reactive current access standards for inverter-based resources rule change request.  The paper considers the existing reactive current fault-response requirements and whether they should be set at levels that better reflect the locationally specific needs of the power system.  The AEMC have invited submissions on the consultation paper until 23 June 2022.

National Energy Retail Rules

No AEMC determinations relevant to the NERR were published.

National Gas Rules

No AEMC determinations relevant to the NGR were published.

Guidelines

On 6 May 2022, the AER released its draft revenue determination guideline for NSW contestable network projects that sets out how the AER will make revenue determinations for network operators competitively selected to carry out network projects under the NSW Electricity Infrastructure Roadmap.  Consultation on the draft guideline closed on 27 May 2022.  

On 18 May 2022, the AER released draft amendments to its guidelines to enable the stand-alone power system (SAPS) rule change.  The rule change will allow distributor-led SAPS to become part of the national electricity system where it may be cheaper, safer and more reliable than connecting to the grid.  The AER has invited submissions on the draft amendments until 30 June 2022.  The AER is due to publish the final guidelines on 1 August 2022.

On 19 May 2022, the AER released its final Export Tariff Guidelines and explanatory statement.  The guidelines were developed as part of the Access, pricing and incentive arrangements for distributed energy resources rule change.  The guidelines provide information and guidance to stakeholders about how networks will be required to justify any future proposals for two-way pricing and how they should define the basic export level.

Other updates

On 5 May 2022, the Energy Security Board (ESB) published its consultation paper on transmission access reform.  The consultation paper includes four shortlisted access models for detailed design.  The ESB has invited submissions from interested parties in response to the consultation paper until 10 June 2022. Click here to read our Energy Alert in relation to the consultation paper.

On 24 May 2022, the ESB released a draft Interim reliability reserves rule change request and a corresponding consultation paper.  The draft rule proposes amendments to the interim reliability reserves to support AEMO in procuring adequate volumes of emergency reserves to protect against load shedding, should a reliability gap occur prior to the longer-term resource adequacy reforms being implemented.  The ESB has invited stakeholder feedback until 22 June 2022. More information can be found here.

The Clean Energy Regulator (CER) finalised the benefit sharing framework for the Emissions Reduction Fund exit arrangement for fixed delivery carbon abatement contracts (CACs) on 27 May 2022.  The CER is currently accepting applications for participants with milestones falling due between 4 March and 30 June 2022.

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

Authors: Paul Newman, Partner; Andre Dauwalder, Senior Associate; Harriet Curran, Lawyer.