Australian electricity and gas markets – November 2024 Update
09 December 2024
In our November 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 14 November 2024, the Australian Energy Market Commission (AEMC) published a more preferable final rule and final determination for its Retailer reliability obligation (RRO) exemption for scheduled bi-directional units (BDUs) rule change. The rule will be in effect as of 3 December 2024.
The final rule introduces the concept of 'exempt market connection points', which relevantly applies where the total annual consumption on the integrated resources system side is 10 GWh or less. This includes the consumption of any BDU and its auxiliary load, as the Contracts and Firmness Guidelines specify. While BDUs themselves are exempt from RRO requirements, this exemption does not extend to the entire connection point where a BDU is present. If a market connection point has a BDU and another load that together consume more than 10 GWh per annum, the Financially Responsible Market Participant could still be liable under Chapter 4A of the National Electricity Rules. We think retailers, may seek to leverage this exemption from the RRO by incentivising customers to install a behind the connection point BDU so that the combined load at the connection point falls below the 10 GWh threshold, thus excluding the connection point from the RRO compliance.
On 28 November 2024, the AEMC published a final electricity rule and final determination for the Accelerating smart meter deployment rule change project. The final rule supports a universal uptake of smart meter across the NEM by 2030. The final rule:
- removes the ability of small customers to opt out of smart meter installation;
- amends the circumstances and requirements for issuing a meter replacement notice; and
- requires retailers to obtain explicit, informed consent from customers for retail tariffs under certain circumstances.
Also on 28 November 2024, the AEMC published a final rule and final determination for its Rescheduling the generator compliance programs review rule change. The final rule postpones the review by 12 months, with it now set to commence on 19 December 2025.
On 28 November 2024, the AEMC published a more preferable draft rule and draft determination for its Improving the cost recovery arrangements for Transmission non-network options rule change. The draft rule allows Transmission Network Service Providers to apply to the Australian Energy Regulator (AER) for adjustments to their network support payment allowance under certain circumstances, as well as approval of methodologies for cost adjustments and the use of services under agreements with non-network option providers.
Stakeholders are invited to provide feedback by 30 January 2025.
The AEMC is seeking feedback on the following consultation papers:
- Electricity pricing for a consumer-driven future (due by 12 December 2024);
- South Australian jurisdictional derogation – Interim reliability reserve eligibility (due by 2 January 2025);
- Assisting hardship customers (due by 16 January 2025); and
- Preventing price increases for a fixed period under retail market contract (due by 16 January 2025).
On 14 November 2024, the AEMC decided to fast track the Improving the NEM access standards – Package 1 rule change request. The proposed rule change aims to enhance the existing access standards and their application to promote efficient plant performance and facilitate quicker, more cost effective connection to the NEM.
The draft determination was published on 5 December 2024 and submissions close on 30 January 2025. It includes some significant technical changes impacting on new connections.
National Gas Rules
No gas rule change requests were initiated in November 2024. No AEMC determinations relevant to the National Gas Rules were published.
Guarantee of Origin Scheme
On 28 November 2024, the Federal Parliament passed the Future Made in Australia (Guarantee of Origin) Bill 2024.
The Guarantee of Origin scheme is a voluntary scheme by which renewable electricity supply and low-emissions products can be certified by the Clean Energy Regulator (CER). The CER has power to issue two types of certificates:
- Renewable Electricity Guarantee of Origin (REGO) certificates; and
- Product Guarantee of Origin (PGO) certificates.
REGO and PGO certificates will be recorded on a public register maintained by the CER, enhancing transparency and boosting consumer confidence in electricity claims and product emissions. Only REGO certificates, however, will be able to be traded. They will be tradeable independently of the physical delivery of electricity.
Other Updates
The AEMC released its 2024 Residential electricity price trends report.
The AER is seeking feedback on its:
- consultation paper on the Reliability Emergency Reserve Trader class waiver by 16 December 2024;
- proposed Electricity transmission post-tax revenue model – November 2024 amendment by 18 December 2024;
- draft Market Monitoring Information Orders and Explanatory Statements by 20 December 2024 – we have separately published an article on the impact of the draft orders see New wholesale electricity and gas market reporting obligations on the horizon — what you need to do to get ready; and
- proposed amendments to the transmission service target performance incentive scheme by 3 February 2025.
The AER also released its:
- report on when the electricity spot market prices and the prices in the Frequency Control Ancillary Services markets went above $5,000 per MWh during July, August and September;
-
2024 Review of the cost benefit analysis and regulatory investment test guidelines;
-
final determination on the 2024 cost thresholds review for the regulatory investment test;
- Financeability guideline.
Authors: Paul Newman, Consultant, Benita Bhikha, Graduate, Ethan Low, Paralegal.
