The AEMC has acted to address the rising risk of wholesale customers receiving inequitable payments during periods of low operational demand.
Today’s final determination removes any ambiguity in the NER that would otherwise prevent the Australian Energy Market Operator (AEMO) introducing a market floor for customer energy at zero megawatt hours during a trading interval. This will stop wholesale customers who have not provided a useful service to the NEM from receiving payments for having net negative demand.
This determination is intended to be a temporary, low-cost solution to deal with the increasing risks associated with low demand periods. A longer-term response is being considered in the determination on Integrating energy storage systems into the NEM. That determination is expected to be finalised later this year.
The rule change recognises that as minimum demand decreases, wholesale customers with positive net loads are forced to pay disproportionate non-energy costs to other customers with negative net loads.
This decision complements the Commission’s rule in the NEM Settlement under low, zero and negative demand conditions rule change (AEMO’s rule change), which requires AEMO to substitute values in its non-energy cost allocation equations when demand is below 150 megawatt hours, during a trading interval.
Working together, these rules now form an effective response to counter the risks of inequitable and disproportionate payments and prevent the settlement risks recognised in AEMO’s rule change.
The rule change will come into effect on 10 October 2021.
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