Australian electricity and gas markets – November and December 2023 update
15 January 2024
15 January 2024
On 2 November 2023, the Australian Energy Market Commission (AEMC) initiated a review of electricity compensation frameworks in the National Electricity Rules (NER), publishing a consultation paper and terms of reference.
The terms of reference identify the three areas of investigation for the review, namely:
The AEMC is seeking stakeholder feedback on the consultation paper by 1 February 2024. For more information see here.
On 9 November 2023, the AEMC published a final determination and final rule completing its enhancing community engagement in transmission building rule change. The new rule enhances the community engagement of transmission network service providers (TNSPs) by:
On 30 November 2023, the AEMC released a draft determination and draft rule as part of its clarifying mandatory primary frequency response (PFR) obligations of scheduled bidirectional units rule change. Under the draft rule, batteries with a capacity of 5 megawatts (MW) registered as scheduled bidirectional units would be required to comply with the primary frequency response requirements (PFRR) when:
The AEMC is inviting stakeholder feedback on the draft determination and rule by 25 January 2024.
Also on 30 November 2023:
On 7 December 2023, the AEMC released a final determination and final rule to amend the market price settings in the NEM for the period 1 July 2025 to 30 June 2028. The market price settings define the limits for NEM wholesale market price outcomes and include the market price cap (MPC), cumulative price threshold (CPT) and administered price cap (APC). The final rule:
For more information on the rule change see here.
On 8 December 2023 the AEMC received a rule change proposal amend the NER to allow State and Territory governments, for which an interconnector passes through, to agree to the allocation of the interconnector's Aggregate Annual Revenue Requirement (AARR) to be recovered from consumers. The AMEC has not yet initiated this rule change request.
On 14 December 2023 the AEMC:
No retail rule change requests were initiated in November and December. No AEMC determinations relevant to the National Energy Retail Rules were published.
No gas rule change requests were initiated in November and December. No AEMC determinations relevant to the National Gas Rules were published.
On 17 November, the AER released a draft interim guidance note which provides guidance to DNSPs on export limits. The guidance note:
The AER is inviting stakeholder submissions on the guidance note by 19 January 2024.
On 1 December 2023, the Australian Energy Market Operator (AEMO) published various system security planning reports, including:
For more information see here.
Also on 1 December 2023:
On 8 December 2023, the AER commenced its review of electricity transmission service target performance incentive schemes (STPIS) by releasing an issues paper. The STPIS provides financial rewards when TNSPs improve service standards, and financial penalties when service standards deteriorate. The issues paper considers the effectiveness of STPIS and outlines possible options to address identified shortcomings. The AER is seeking stakeholder submissions by 5 April 2024.
On 14 December 2023, AEMO published the 2023 Western Australian (WA) Gas Statement of Opportunities (GSOO) which provides a 10-year forecast of demand and supply within WA’s domestic gas market. The report forecasts WA’s domestic gas demand and potential gas supply and provides an overview of gas infrastructure and emerging issues that affect gas market participants and other stakeholders.
On 15 December 2023, AEMO released the Draft 2024 ISP which provides a comprehensive roadmap for the NEM's energy transition and a plan for essential infrastructure to meet future energy needs. The ISP identifies actionable and future ISP projects and serves the broader purposes of informing market participants, investors, policy decision makers and consumers. AEMO is seeking submissions on the Draft 2024 ISP by 16 February 2024. For more information see here.
On 19 December 2023, AEMO released results for the Round 3 Long-Term Energy Service Agreements (LTESA) tender.
The 5 projects represent 750 MW of renewable energy generation and 524 MW (4,192 MWh) of long-duration storage. Each storage project will also have a continuous discharge capacity of at least 8 hours.
The successful projects in Tender Round 3 are:
The projects are expected to be operational before 2028.
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Authors: Andre Dauwalder, Counsel; Samirah Delor, Graduate and Murray Rissik, Paralegal.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.