Australian electricity and gas markets – September 2023 update
04 October 2023
In our September 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 September 2023, the Australian Energy Market Commission (AEMC):
- made a draft rule to keep the electricity system reliable for households and businesses as aging coal fired generation retired. The draft rule:
sets the market price cap and cumulative price threshold at the level recommended by the Reliability Panel in the 2022 Reliability Standard and Settings Review adjusted for inflation; and
sets the administered price cap at $600/MWh, which is different from the Reliability Panel's recommendation of $500/MWh but consistent with its current value.
Stakeholders are invited to make submissions until Thursday, 26 October 2023.
- published its final decision to revoke the South Australian 'destructive winds' event to protect energy customers from excessive operational costs associated with maintaining power system security. The protected event will be revoked from 30 March 2024, prior to the connection of Project EnergyConnect Stage 1 to the grid, expected in April 2024.
On 20 September 2023, the AEMC reported that it is currently investigating options to improve financing arrangements to support the delivery of new transmission projects. The AEMC has extended the period of time for making the draft rule on the financeability and concessional finance rule changes requests. The draft rules will now be published on Thursday, 16 November 2023.
On 21 September 2023, the AEMC:
- made a final rule to extend the application of the 'interim reliability measure' (IRM) to the Retailer Reliability Obligation for three years to support reliability in the electricity system. Extensive consultation has occurred to date on the extension of the IRM and the Commission has considered stakeholder views in making its decision to extend the IRM from 2025 to 2028.
- released final recommendations to support the integration of household energy devices into the grid. The AEMC recommended 10 immediate actions by industry, jurisdictions and the market bodies to improve compliance in regard to the technical standards to integrate consumer energy resources in the power system.
- made a decision to apply an emissions reduction objective to its rule-making and review processes with the South Australian Parliament passing legislation to add emissions reduction to the national energy objectives. The Emissions Reduction Objectives Bill 2023 was tabled in the South Australian parliament on 14 June 2023, and that legislation has now passed and assent gazetted. The AEMC released a guide to support this change as well as a targets statement, which is a list of jurisdictional targets to be considered by the three market bodies, and others, when applying the national energy objectives.
National Energy Retail Rules
On 28 September 2023, the AEMC released a draft report on improvements to the retailer reliability obligation (RRO). The draft recommendations are designed to improve the RRO by reducing costs for retailers in complying with the RRO and therefore, reducing costs for consumers. Submissions in response to the draft report are being accepted until Thursday, 2 November 2023.
National Gas Rules
No gas rule change requests were initiated in September. No AEMC determinations relevant to the National Gas Rules were published.
Other Updates
On 27 September 2023, the Australian Energy Market Operator (AEMO) released an update to the 2023 Electricity Statement of Opportunities (ESOO) to incorporate the 'Extending the application of the IRM to the RRO' rule change.
Further, in its September 2023 update to the 2023 ESOO, AEMO identified a forecast reliability gap in South Australia in 2026-27. AEMO made a request to the AER to consider making a T-3 reliability instrument for the identified forecast reliability gap. The T-3 cut-off day for this reliability gap is 1 December 2023.
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Authors: Andre Dauwalder, Counsel; Nikita Summers, Graduate.
