The Energy Security Board (ESB) has released a paper outlining its proposed high-level design of a capacity mechanism for the National Electricity Market (NEM).

As part of the Post-2025 market design reforms, Energy Ministers tasked the ESB with progressing detailed design work on a mechanism that specifically values capacity in the NEM. The ESB’s high-level design paper builds on stakeholder feedback received on the scope of works document and project initiation paper, which were released in December 2021, and the ESB’s further design work. The ESB has also been guided by the principles agreed to by Energy Ministers in September 2021.

The paper outlines the ESB’s preferred approach to key design choices, including:

• who is eligible to participate,
• the degree of centralisation of forecasting and procurement,
• the nature of the obligation placed on capacity providers in return for a capacity payment,
• the role of interstate trade, and
• how costs are passed through to customers.

Stakeholders can register to attend an information forum on Friday, 1 July 2022 at 11am to 1pm below.

The ESB will continue working with stakeholders on developing the final design. The ESB will develop a draft detailed design by the end of the year, with a final recommendation due to Ministers early in 2023. 

Please note log-in details for the webinar will be circulated in a separate email once registration close.