The Australian Energy Market Commission has published a consultation paper to initiate rule change requests relating to compensation for market participants affected when the Australian Energy Market Operator intervenes in the market.
When AEMO intervenes in the market by dispatching the reliability and emergency reserve trader (RERT) or issuing a direction, it is required to pay compensation to those participants directed to provide services, and to those participants dispatched differently as a result of the intervention.
The Commission has commenced consultation on two AEMO rule change requests relating to the second kind of compensation – referred to in broad terms as “affected participant compensation”.
The first rule change request concerns the compensation payable to scheduled generators and scheduled network services if they are dispatched differently due to an intervention event.
Currently, these participants are eligible for compensation in relation to energy related losses but not losses related to market ancillary services. The AEMO rule change request seeks to address that by allowing participants to be compensated if they incur losses related to market ancillary services.
The second rule change request relates to scheduled loads which are dispatched differently as a result of an intervention event. Scheduled loads in the NEM include pumped hydro and large scale batteries.
Compensation for scheduled loads is calculated in accordance with a formula which includes as an input the price of the highest priced band specified in a dispatch bid – known as “BidP”. AEMO’s rule change request seeks to change the definition of "BidP" as the current definition could result in participants being under-compensated where they are dispatched differently due to an intervention event.
The consideration of these two rule change requests is part of a wider Commission work program updating the framework for interventions in the NEM.
Submissions from stakeholders are requested by 16 July 2020.
Media: Kellie Bisset, Media & Content Manager, 0438 490 041 or (02) 8296 7813