Improving the transparency of electricity demand projections

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The Australian Energy Market Commission (AEMC) has made a final rule to improve the transparency and consistency of information the Australian Energy Market Operator (AEMO) provides to signal whether or not electricity supply is projected to meet demand in the medium-term.

This forecasting exercise is called the medium-term projected assessment of system adequacy, or MT PASA, and is used to assess whether the reliability standard is projected to be met across a two-year horizon.

AEMO recently introduced a new, more accurate methodology for these forecasts that probabilistically assesses whether the reliability standard is projected to be met.

Under the National Electricity Rules, AEMO is required to produce multiple forecasts as part of the MT PASA. Several of these outputs report on the aggregate generation capacity of each region in the national electricity market.

The rules require AEMO to consider the impact of network constraints in this context. The new probabilistic methodology that has been adopted for the MT PASA is inconsistent with the consideration of network constraints for these specific forecasts, and including them may result in misleading information being provided to the market.

The new rule removes this requirement for AEMO to consider network constraints when publishing aggregate generation capacity for each region in the MT PASA. The impact of network constraints will still be included in other relevant forecasts in the new MT PASA.

As the rule change request was considered non-controversial, the AEMC followed an expedited rulemaking process. The new rule starts on 31 May 2018.

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