Australian electricity and gas markets - July 2021 update

What you need to do:

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

National Electricity Rules

• On 8 July 2021, the Australian Energy Market Commission (AEMC) published its final rule and determination in relation to its Connection to dedicated connection assets rule change, reforming the connection asset framework to create a new 'designated network asset' category and allowing multiple parties to connect to a single transmission network connection point. Those interested can view the final rule and determination on the AEMC's website here and read our article on the rule change here.

• On 15 July 2021, the AEMC published two long awaited rule changes concerning energy storage and system services:
  
  • The draft determination and rule in relation to the integration of energy storage into the National Energy Market (NEM), which includes sweeping changes including the introduction of a new market participant category (integrated resource provider), clarification of the application of transmission use of system and distribution use of system charges to storage and hybrid facilities and changes to energy cost recovery mechanisms - visit the AEMC's website page for further details here.
  • The final determination and rule in relation to fast frequency response market ancillary services, to introduce two new "very fast" frequency control ancillary services (very fast raise and very fast lower) (to commence 9 October 2023) – visit the AEMC's website page for further details here.
  • Interested parties can also review our commentary on these rule changes here. 

• The AEMC delayed publication of the following expected final rule changes:
  • Access, pricing and incentive arrangements for distributed energy resources rule change – final determination and rule now due 12 August 2021. See further details here.
  • Efficient management of system strength rule change – final determination and rule now due 21 October 2021. See further details here.

National Energy Retail Rules

• No retail rule change requests were received in July. No AEMC determinations were published.

National Gas Rules

• No gas rule change requests were received in July. No AEMC determinations were published. 

Other updates

• On 1 July 2021, the Australian Energy Regulator published its annual report on the wholesale electricity and gas markets, transmission and distribution networks and energy retail markets for 2021. The State of the Energy Market for 2021 can be accessed here.
• On 1 July 2021, the AEMC completed its review of the Reliability Standard and Settings Guidelines, which set out the principles, assessment approach and assumptions that the Reliability Panel must apply when conducting its review of the Reliability Standard and Settings. The updated guidelines can be viewed here. 
• Throughout July, the Clean Energy Regulator (CER) sought comments (which were due 27 July 2021) on the Carbon Credits (Carbon Farming Initiative – Carbon Capture and Storage) Methodology Determination 2021. The CER has indicated that it seeks to finalise the method by September 2021. Interested parties can find further information here and can view our commentary on the determination here.
• On 15 July, the AEMC published a directions paper on compensation for market participants affected by intervention events, calling for comments on the three proposed ways for compensation to be calculated and a proposal to clarify the objective of the compensation framework by 26 August 2021. Further information can be found here. 
• On 23 July 2021, the Australian Energy Market Operator (AEMO) published its Quarterly Energy Dynamics Q2 2021 Report, covering market dynamics, trends and outcomes during this period (1 April – 30 June 2021). The report can be viewed here. 
• On 28 July 2021, the Energy Security Board (ESB) advised it had handed the final advice on its redesign of the NEM to the Energy National Cabinet Reform Committee ahead of the expected publication of the final market design recommendations in August 2021. The news follows its Post-2025 Market Design Options Paper released in April 2021. The media release can be viewed here. 
• On 29 July 2021 the AEMC published a draft report for the Review of the Gas Supply Guarantee. The draft report makes recommendations for the Australian Government to extend the term of the Gas Supply Guarantee by another three years to March 2026, and that an assessment on the long term need of Gas Supply Guarantee to be carried out after this extended period. Submissions on the draft report are due 9 September 2021 and further details can be found here. 

Authors: Paul Newman, Partner; Andre Dauwalder, Senior Associate and Jacklin Molla, Associate