The Australian Energy Market Commission (AEMC) has made a final rule to allow distribution connected facilities to participate in the Victorian declared wholesale gas market (DWGM). These facilities will be able to supply natural gas, low-level hydrogen blended gas, biomethane and other renewable gases.
Currently, the Victorian DWGM only recognises transmission-connected facilities and does not allow market participation from entities connected to distribution pipelines.
This work addresses that by amending the National Gas Rules (NGR) to also recognise facilities connected at the distribution level. The new framework will commence on 1 May 2024.
Chair of the AEMC, Anna Collyer said the final rule will provide the foundation for innovation that will allow the hydrogen industry to develop further.
“These reforms will enable proposed pilot projects to participate in the Victorian gas market, encouraging technological innovation in an evolving market and regulatory environment as it seeks to promote safety, reliability, and security of supply,” Ms Collyer said.
The rule change will ensure the current design of the Victorian gas market is maintained whilst clarifying the roles and responsibilities of all market participants.
The changes primarily apply to distribution connected facilities with minor changes being made to existing facilities where a cohesive approach was required. The changes are categorised across three key areas:
- Market operations, including registrations, scheduling and bidding
- Market settlements, including title, custody and risk, and allocations
- System operations, including connections, metering, and gas quality.
The AEMC notes that there may be technical matters governed by Victorian legislative and regulatory arrangements that still need to be considered by other bodies to safely enable injections into distribution networks which are beyond the scope of this rule change and the AEMC’s rule making power.
The Commission recommends stakeholders collaborate with Energy Safe Victoria, the Victorian Department of Energy, Land, Water and Planning, and any other relevant regulatory bodies to progress any further work required to enable distribution connected facilities to operate in a safe and efficient manner.
This rule change was requested by the Victorian Minister for Energy, Environment and Climate Change, The Hon. Lily D’Ambrosio and works towards facilitating the Victorian Government work program, such as the Renewable Hydrogen Industry Development Plan, Gas Substitution Roadmap, Towards 2050: Gas Infrastructure in a Zero Emissions Economy initiative and Climate Change Strategy to reach net-zero emissions by 2050.
This rule change was progressed in parallel with the AEMC’s Review into extending the regulatory framework to hydrogen and renewable gases. The final report has also been published today.
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