The AEMC has today made a more preferable draft rule to rationalise the existing requirements on generators to specify the minimum rates at which they may increase or decrease output, referred to as ‘ramp rates’.

This more preferable draft rule has been made following the Commission’s consideration of a rule change proposed by the Australian Energy Regulator (AER), which would require that ramp rates reflect the maximum technical capability of generating plant. The AER has raised concerns that, at times, generators use ramp rates to achieve commercial outcomes that can lead to inefficiencies in the wholesale market and in the management of system security.

The Commission has not been convinced that a change as extensive as that proposed by the AER is warranted, and has concerns that the proposed rule might be difficult to apply in practice. However, in examining and consulting on the rule change request, the Commission has concluded that the existing provisions governing ramp rates risk distorting competitive market outcomes and investment signals. The Commission’s more preferable draft rule refines the current arrangements to address these issues.

The Commission’s more preferable draft rule would require that ramp rates provided by generators should be at least one per cent of maximum generation capacity per minute.

The revised requirements would be applied consistently and proportionately, regardless of generator size, plant configuration or technology type. This would promote more efficient wholesale market outcomes and generation investment, in the long term interests of consumers.

Submissions on the Commission’s draft determination will close on 9 October 2014.