The AEMC, Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) have designed a COVID-19 power plan for energy market adjustments during the pandemic.
The COVID-19 power plan will ease regulatory pressure on industry and strike a balance on what work needs to continue, what can be slowed down and what can be deferred.
AEMC Chair, John Pierce, said, “Our three organisations have been working very closely together and thinking ahead when it comes to protecting consumers and supporting industry at risk from COVID-19.
“This plan’s top priorities are power system security and projects that support consumers and keep industry financially viable.”
“But at the same time, it is designed to protect the most important energy market reforms already underway. This is so we can continue to deliver a cheaper, fairer, lower emissions power sector for consumers.”
The COVID-19 power plan has been sent to industry for feedback and will be finalised at the end of April 2020. Stakeholder workshops to discuss the plan on prioritising the timeframes are also being planned.
Among the major reforms to continue are:
- Five-minute settlement being progressed within AEMO, but a proposed start date for industry delayed by a year to delay costs for industry during the pandemic
- Interim reliability and security initiatives as agreed at March 2020 COAG Energy Council
- Work on developing a two-sided market, reforming access to the grid and introducing demand response mechanism into the market
- Progressing two recent rule changes critical to power system security:
- One to improve preparation for and response to blackouts through changes to system restart ancillary services
- The other to mandate generators to help control system frequency
“It is important to stress that AEMO’s own work on implementing the critical five-minute settlement reform will not stop,” Mr Pierce said.
“We recognise this market reform is critical to rewarding fast-response energy generation like batteries, demand response providers and new generation gas peaker plants. But, it does require a large-scale IT response by the industry.
“By pausing requirements on industry for 12 months, we hope to take the financial pressure off during this economically challenging time. And, while this will postpone the start date of 1 July 2021, it will mean we can still pick up the baton post-pandemic because AEMO will have done its preparatory work.
“But, we do want to hear from industry about the timing outlined in the plan and look forward to discussing these.”
Each of the decisions to progress, pause or extend timeframes outlined in the plan were made subject to a set of mutually agreed criteria.
For work that is flagged to progress, the energy market bodies will explore ways to be flexible so stakeholders can actively engage. Market participants having problems with compliance are encouraged to contact the AER at an early stage.
The three bodies will also collaborate on which regulatory work can be grouped so that implementing change can be more coordinated and therefore cheaper.
“The AEMC also has the ability to extend statutory timeframes for rules on foot to ease demands on industry resources,” Mr Pierce said.
Further details about the workshops will be released in due time.