Market Review: Completed
Overview
On 21 December 2007 the Reliability Panel (Panel) published its Final Report for the Comprehensive Reliability Review. This Final report reaches a number of conclusions about the NEM’s reliability mechanisms, and outlines a range of activities in 2008 to implement those recommendations.
The Panel had been requested by the AEMC to undertake in a comprehensive and integrated process several reviews relating to the following key high level NEM standards and parameters:
- the NEM reliability standard;
- the Tasmanian reliability and frequency standards (complete in 2006);
- the Value of Lost Load (VoLL), market floor price and cumulative price threshold (CPT); and
- whether the reliability safety net should be allowed to expire (the subject of a recent Rule change assessment by the AEMC) or alternative arrangements put in place.
The AEMC provided the Panel with a terms of reference (amended on 22 June 2007) for the comprehensive review. This included a requirement that the Panel complete its work and provide its report to the Commission by 31 March 2007 (revised to 30 November 2007). A statement of process sets out the broad scope, process and consultation steps involved.
The Panel published the issues paper for the Comprehensive Reliability Review on 11 May 2006. The Panel received 23 submissions in response to the issues paper. Ten stakeholders made presentations to the Panel at its Stakeholder Forum on 27 July 2006. The Panel also received eight supplementary submissions.
In March 2007 the AEMC modified the Panel’s terms of reference to extend the timetable for the work program for the Comprehensive Reliability Review from 31 March 2007 to 31 July 2007. This extension to the timetable was to allow stakeholders additional consultation time.
The Panel published its Interim Report for the Comprehensive Reliability Review on 2 April 2007. The Panel received 15 submissions in response to its report. The Interim Report included the Panel’s Draft Determination on the 2007 VoLL Review. The Panel did not receive any submissions on this Draft Determination and published a final 2007 VoLL Review on 27 April 2007.
On 21 June 2007 the AEMC advised the Reliability Panel of an additional component to its terms of reference for the Comprehensive Reliability Review (CRR). This component incorporates the request of the MCE to provide advice on the effectiveness of current market arrangements in managing generation input constraints and energy shortfalls. View the letter from the SCO (PDF) on behalf of the MCE.
The Panel was requested to:
- Provide advice to the AEMC for the MCE by mid July 2007 on what, if any, improvements can be made to arrangements, including reserve trader, to strengthen the market’s ability to manage generator input constraints.
- Extend the timetable of the comprehensive reliability review to include a second interim report which will seek feedback from stakeholders on the above advice before its final report is issued.
The AEMC requested the Panel to incorporate the following key dates in its work program for the CRR:
- By mid July 2007 – advice to the AEMC for the MCE
- By 31 August 2007 – second Interim Report of CRR, including the Panel’s proposed changes (if any) to the reserve trader mechanism.
- By 30 November 2007 – final report of CRR.
On 30 August 2007 the Panel published its Second Interim Report for the CRR. Appendix C of this report included an Exposure Draft of the:
- Associated Rule change proposal that the Panel intends to submit to the AEMC; and
- Guidelines associated with that Rule change proposal.
The Panel also held a stakeholder forum at the Melbourne Airport Hilton Hotel on13 September 2007. The purpose of the forum was to allow interested parties that had previously made submissions to the CRR to present their views and supporting information to the Panel in more detail prior to the preparation of the Final CRR Report.
The Panel received 14 submissions to the Second Interim Report. Eight stakeholders made presentations to the Panel at its stakeholder forum.