ESB Capacity Mechanism High-level Design Paper released
20 June 2022
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The Energy Security Board (ESB) has released a high-level design paper outlining the proposed capacity mechanism for the National Electricity Market (NEM), including its proposed direction on fundamental design decisions and the key considerations informing these positions to be submitted to federal and State .
The design paper proposes a capacity mechanism which pays providers of capacity to keep capacity available during certain periods to ensure there is a sufficient energy mix to deliver affordable and reliable power to consumers.
Some of the key features of the proposed mechanism are set out below:
Stakeholders can submit submissions on the design paper via email to info@esb.org.au. Any confidentiality claims should be clearly indicated by noting "confidential" in the document name and body of the email. The ESB will then publish submissions on the Energy Minister's website, subject to confidentiality.
Submissions on the paper are due by 25 July 2022, with details of a stakeholder webinar to be confirmed in coming days.
The ESB will return a draft detailed capacity mechanism design to the Energy Ministers by December 2022, which will then be put to stakeholders for further consultation. The final detailed capacity mechanism design will be presented to the Energy Ministers in February 2023.
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.
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