The Australian Energy Market Commission (AEMC) is carefully examining a request to improve the reliability of the energy market, by releasing a consultation paper on a rule change proposal submitted by the Reliability Panel (Panel).
The Panel’s rule change request is based on recommendations made in the 2022 Reliability Standard and Settings Review (RSS Review). The proponent’s view is that changing the market price settings to levels it suggested, will encourage investment in new generation and ensure a reliable power supply for consumers during the transformation to more renewable energy sources.
As part of this rule change process, the Commission will carefully consider both reliability and potential price impacts and balance the overall benefits sought to be achieved for consumers.
The Panel’s recommendations are to:
- Progressively increase the Market Price Cap (MPC) and Cumulative Price Threshold (CPT) in the period of 1 July 2025 – 30 June 2028, to reach the level required to incentivise new entrant investment, consistent with the reliability standard, by the final year of the review period.
- Increase the Administered Price Cap (APC) to a level necessary to avoid undue reliance on compensation processes during an administered price period, and avoid the need for future market suspension, similar to the events of June 2022.
The Commission remains focused on maintaining a reliable, sustainable and affordable energy system for all Australians and will always strive to strike an appropriate balance between these competing objectives.
This rule change is part of a broader program of work being completed by the AEMC, other regulatory bodies and the State and Federal governments to ensure the reliability framework is fit for purpose as the traditional generation fleet begins to retire from service.
Submissions to the consultation paper are open until 22 June 2023. The AEMC will publish a draft determination in August 2023.
Visit the project page for more information and contact details.
Media: Jessica Rich, 0459 918 964, media@aemc.gov.au