The AEMC has made a final rule to make it easier for participants to secure and trade capacity certificates in the Victorian declared wholesale gas market (DWGM).
The DWGM enables producers, large gas users and retailers to bid to make withdrawals from and injections into the main system for transporting gas in and through Victoria.
The rule reduces the complexity of the existing regime for allocating and trading pipeline capacity rights in Victoria.
Under the final rule, a new capacity certificates regime will be introduced to help participants manage scheduling risk by providing tie-breaking benefits when bids to buy gas or offers to sell gas are tied at the same price.
Specifically, the final rule retires the current instruments ̶̶ the authorised maximum daily quantity (AMDQ) and AMDQ credit certificates (AMDQ cc) ̶̶ and replaces these with:
- entry capacity certificates that provide injection tie-breaking benefits
- exit capacity certificates that provide withdrawal tie-breaking benefits
In addition, the final rule:
- encourages more efficient use of pipeline capacity by allowing market participants to buy a set of entry and exit certificates, through auctions, that gives greater price and volume certainty to their preferred transportation pathways
- requires the Australian Energy Market Operator to develop a listing service, which market participants can use to list any capacity certificates they may want to buy or sell
- improves and simplifies current arrangements, which may encourage new entrants and promote competition in upstream and downstream markets
The new regime will commence on 1 January 2023, which is consistent with the start of the next access arrangement period for the Victorian declared transmission system (DTS).
In deciding to make this final rule, the Commission has taken into account interactions with the final rule for the separate rule change on DWGM simpler wholesale price, also published on 12 March 2020.
Media: Kellie Bisset, Media and Content Manager 0438 490041 or (02) 8296 7813