Australian electricity and gas markets – October 2024 Update 

In our October 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 3 October 2024, the Australian Energy Market Commission (AMEC) published a more preferrable final rule and final determination that gives jurisdictions the flexibility to agree on the cost allocation for new regulated interconnectors across the National Electricity Market (NEM). The final rule will commence on 3 July 2025, meaning that it can be applied from the start of the 2026-2027 financial year.

The final rule:

• will apply to both private infrastructure and government owned and funded assets;
• operates as an alternative to the existing cost allocation pathway for interconnectors;
• provides more flexibility for Ministers to make an agreement;
• does not impact the total regulated revenue that a Transmission Network Service Provider (TNSP) would earn.

The AEMC also on 3 October 2024:

• published a consultation paper on a rule change request to include distribution network resilience in the National Electricity Rules. The rule change seeks to implement a distribution network resilience expenditure framework to improve preparation, management and recovery from severe weather events. Stakeholders are invited to provide feedback by 7 November 2024.
• expedited the rule change request for rescheduling the generator compliance programs review. The rule change would delay the review by 12-months, starting on 19 December 2025.

On 10 October 2024, the AEMC initiated its real-time data for consumers rule change request. The rule change seeks to improve the level of access that consumers have to real-time smart meter data. Stakeholders are invited to provide feedback by 7 November 2024.

On 24 October 2024, the AEMC published a consultation paper on allowing AEMO to accept cash as credit support from market participants in the NEM. Stakeholders are invited to provide feedback to the consultation paper by 21 November 2024.

National Energy Retail Rules

No energy retail rule change requests were initiated in October 2024. No AEMC determinations relevant to the National Energy Retail Rules were published.

National Gas Rules

No gas rule change requests were initiated in October 2024. No AEMC determinations relevant to the National Gas Rules were published.

Other Updates

The AEMC also released its:

• final report on offshore electricity infrastructure, which analyses gaps and barriers in the National Electricity Rules; and
• report, A Consumer-Focused Net Zero Energy System, which sets out its vision and focus areas.

The Australian Energy Regulator (AER) is seeking feedback on its:

• issues paper regarding the 2025-26 Default Market Offer price determination by 8 November 2024;
• issues paper regarding the Ring-fencing guideline (electricity transmission) by 13 November 2024; and
• draft decision on its Compliance Procedures and Guidelines for gas pipeline service providers by 15 November 2024.

The AER also released its:

• Wholesale Markets Quarterly report, for July to September 2024;
• amended Expenditure Forecast Assessment Guidelines for electricity distribution and transmission;
• Wholesale gas market focus report: Day Ahead Auction; and
• Export limits guidance note.

Minimum System Load Notices - AEMO

From late September and through October (and also now in early November) AEMO has issued a number of minimum system load notices.

They seek a market response to ensure minimum system load or may ultimately lead AEMO to issue directions to bi-directional units to charge or to NSPs to disconnect (temporarily) renewable generators.

We expect to see significant pressure within the industry to resolve this ongoing issue.

Minister for Energy – Expansion of the capacity for the next round of the Capacity Investment Scheme

Minister Chris Bowen, in his speech to the AFR Energy Summit, said

"I am pleased to announce today that we have decided to make the next round of auctions bigger than originally envisaged to get more of these high-quality projects connected to the grid more quickly.

We originally planned that the next two tender rounds would call for 2 gigawatts of dispatchable renewable power and 4 gigawatts of renewable energy generation.

I’m announcing today that this auction will now be for 4 gigawatts of dispatchable power and 6 gigawatts of renewable generation."

Authors: Dan Brown, Partner; Dale Gill, Partner; Paul Newman, Consultant; Benita Bhikha, Graduate and Ethan Low, Paralegal.