Market Review: Open

Overview

The Reliability Panel (Panel) is reviewing whether the current definition of unserved energy for the purposes of the reliability standard in the National Electricity Rules (NER) is still fit for purpose and, specifically, what events should be included or excluded from the calculation of unserved energy when evaluating whether the reliability standard has been met.
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 The Reliability Panel (Panel) is reviewing whether the current definition of unserved energy for the purposes of the reliability standard in the National Electricity Rules (NER) is still fit for purpose and, specifically, what events should be included or excluded from the calculation of unserved energy when evaluating whether the reliability standard has been met. 

Unserved energy and the reliability standard

In the NER, unserved energy is a measure of the amount of customer demand that cannot be supplied within a region due to a shortage of generation, demand-side participation or interconnector capacity. 

The reliability standard, which guides how much capacity is needed in the national electricity market, is expressed in terms of unserved energy. Under the reliability standard, unserved energy must not be more than 0.002 per cent of the total energy demanded in a given year.

In this review, the Panel is seeking to clarify and simplify the definition of unserved energy used in post-event analysis of wholesale supply interruptions. This will involve examining what should be included or excluded from the calculation of unserved energy when evaluating whether the reliability standard has been met. This could provide clearer and more accurate information to the market about if and where more capacity may be needed.

Consultation paper

On 4 April 2019 the Panel published a consultation paper seeking stakeholder feedback on four key potential issues:

  • The definition of unserved energy in Chapter 10 of the NER may not make it clear enough that "unserved energy" for the purposes of the reliability standard is isolated to wholesale supply interruptions.
  • The current contingency-based definition of unserved energy used to determine whether the reliability standard is met could be potentially complex to interpret in a constantly evolving power system. 
  • The NER, as currently drafted, do not exclude all power system security events from the definition of unserved energy. 
  • The Panel is also considering how to account for AEMO's reliability-related interventions, such as involuntary load shedding or the Reliability and Emergency Reserve Trader (RERT).

The review will not consider the appropriateness of the reliability standard. This matter is being considered by the AEMC in the Enhancement to the RERT rule change request.

Next steps

Submissions to the consultation paper are due by 02 May 2019.

Following this consultation with stakeholders and based on the feedback received and the Panel's own considerations, the Panel will assess whether there is benefit in changing the definition of unserved energy in the NER or if the existing definition continues to be appropriate.

If a need is identified, the Panel would then submit a rule change request to the AEMC to change the definition of unserved energy, and publish a final report outlining its rationale.

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Documentation

INITIATION

AEMC Documents