The AEMC has made a draft rule to reduce the complexity of the authorised maximum daily quantity (AMDQ) regime and make it easier for participants to secure and trade capacity certificates in the Victorian declared wholesale gas market (DWGM).
Under the draft rule, a new capacity certificates regime will be introduced to help participants manage scheduling risk by providing tie-breaking benefits when bids to buy gas or offers to sell gas are tied at the same price.
The new capacity certificates will also protect the certificate holder from congestion uplift payments when their withdrawals are less than their exit capacity certificate holdings, and provide some limited curtailment protection.
Specifically, the draft rule retires the current instruments - the authorised MDQ and AMDQ credit certificates (AMDQ cc) - and replaces these with:
- entry capacity certificates that provide injection tie-breaking benefits
- exit capacity certificates that provide withdrawal tie-breaking benefits and congestion uplift protection
- uncontrollable exit capacity certificates that provide congestion uplift protection and limited curtailment protection.
In addition, the draft rule:
- encourages more efficient use of pipeline capacity by allowing market participants to buy a set of entry and exit certificates, through auctions, that gives greater price and volume certainty to their preferred transportation pathways
- requires steps towards a secondary trading platform, which will reduce the search and transaction costs associated with trading certificates in the DWGM
- improves and simplifies current arrangements, which may encourage new entrants and promote competition in upstream and downstream markets.
The proposed new regime would commence on 1 January 2023, which is consistent with the start of the next DTS access arrangement period.
In deciding to make this draft rule, the Commission has taken into account interactions with the draft rule for the separate rule change on DWGM simpler wholesale price, also published on 5 September 2019.
Submissions on the draft determination and draft rule are invited by Thursday 24 October 2019.
Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817