On 29 November 2012, the AEMC published the Small Generation Aggregator Framework final determination and final rule. The rule as made seeks to lessen potential barriers to fully participating in the market faced by small generators.

The rule was proposed by the Australian Energy Market Operator (AEMO).  AEMO considered that, for generators that would otherwise be exempt from registration requirements, the process of becoming a Market Generator to sell output at the spot price represented an inefficient cost. To address this AEMO proposed that small generating units be able to aggregate and sell their generation through a third party.

The rule as made is the proposed rule with consequential alterations. A new category of Market Participant has been added to the National Electricity Rules (NER). This Market Small Generation Aggregator (MSGA) will be able to receive the spot price on behalf of a portfolio of generators that are exempt from registration requirements due to their small size. This change will provide more options to the owners of small generating units, potentially leading to a more efficient wholesale market.

The rule as made differs from the draft rule so as to better integrate MSGAs into existing market structures. MSGAs will be required to pay ancillary service fees in a similar manner to Market Generators. Furthermore the individual small generating units that are part of a MSGA will be required to use a type 1-4 meter.   

Background

On 22 December 2011 AEMO submitted the Small Generation Aggregator Framework rule change request. AEMO proposed this rule change to increase the participation of small generators in the National Electricity Market (NEM).

Any entity attempting to register a generator in the NEM must follow the same registration process regardless of size. AEMO are concerned that this registration process may be a barrier to the efficient participation of small generators (defined as less than 5MW capacity or between 5MW and 30MW with an annual export of less than 20GWh a year). Small generators  have the option of choosing to be exempt from registering and instead selling their generated electricity directly to a Market Customer at the same connection point. However this option precludes small generators from participating in the NEM and so from operating as peaking plant.

AEMO’s rule change request was in response to this issue. The proposal was to add Small Generation Aggregator as a new category of market participant in to the NER.

The AEMC published a consultation paper on this rule change on 15 March 2012. Thirteen submissions were received this first round of submissions.

On 21 June 2012 the AEMC decided under s.107 of the NEL to extend by two weeks the period of time for making the draft rule determination. On 5 July 2012 the AEMC published a draft determination and draft rule under s.99 of the NEL. There were nine submissions in response to the draft determination.

On 27 September the AEMC decided under s.107 of the NEL to extend by six weeks the period of time for making the final rule determination. On 8 November the AEMC decided under s.107 of the NEL to extend by a further three weeks the period of time for making the final determination.