Market Reviews: Open

Reliability Frameworks Review

Reference:
EPR0060
Reviewed by:
AEMC
Initiated by:
AEMC
Date initiated:
11-Jul-2017
Project Leader:
Sarah-Jane Derby
Overview

The AEMC has published an interim report for its review into the market and regulatory frameworks that underpin reliability in the national electricity market (NEM), including consideration of several recommendations from the Independent Review into the Future Security of the National Electricity Market that relate to reliability.

The AEMC has published an interim report for its review into the market and regulatory frameworks that underpin reliability in the national electricity market (NEM), including consideration of several recommendations from the Independent Review into the Future Security of the National Electricity Market that relate to reliability.

Interim report

This interim report provides an update on the Commission's views to date to facilitate stakeholder consultation and feedback.
 
The interim report assesses the following areas of the reliability framework, highlights issued raised by stakeholders and discusses the Commission's preliminary views on:
  • key concepts of dispatchability and flexibility
  • forecasting and information processes
  • market-based aspect of reliability, that is, the contract market.
  • the following Finkel Panel recommendations: the need for a strategic reserve, development of ways to facilitate demand response in the wholesale market and the suitability of day-ahead markets.
Submissions are due by 6 February 2018, with this date based on the need to meet the COAG Energy Council’s timeframes for its implementation plan for the Independent Review into the Future Security of the National Electricity Market. We are conscious that this consultation period includes the holiday period and so we encourage stakeholders to meet with us – please contact Sarah-Jane Derby on 02 8296 7823 or sarah.derby@aemc.gov.au

Background

Over the past  18 months, a series of events (such as the load shedding in South Australia and NSW in February 2017), as well as numerous policy debates (for example, the Energy Security Board advice on the national energy guarantee) have led to a greater focus on reliability in the NEM.
 
At the same time, the NEM is changing at a rapid pace on both the demand and the supply side. The AEMC considers that it is timely to assess whether the current market and regulatory reliability frameworks are appropriate and has self-initiated this review under Section 45 of the National Electricity Law. 
 
The Commission published its terms of reference on 11 July 2017 and published an issues paper on 22 August 2017. We received 18 submissions to the issues paper, which can be found below.
 
Reference Group, Technical Working Group and other collaboration
 
The Commission has set up a Reference Group to provide high-level input into the review and a Technical Working Group to provide technical advice. 
 
The Commission notes that AEMO is currently working on a number of pieces of work that relate to this review. These will further inform the assessment of the issues, as well as potential solutions, and we will work closely with AEMO on this.
 
Next steps

The AEMC intends to publish a directions paper for stakeholder consultation in March 2018.

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