Announcement date
31 March 2022
Link to announcement
AEMC publishes draft rule on incorporating distribution connected facilities in Victorian gas market | AEMC
Problem being addressed
The Declared Wholesale Gas Market (DWGM) was established by the Victorian Government in 1999 to support retail competition and encourage diversity of supply and upstream competition. Only gas facilities that are connected to the declared transmission system (DTS) are able to participate in the DWGM, which effectively excludes the participation of distribution connected production and storage facilities. As distribution connected facilities include hydrogen, biomethane and renewable gas facilities, existing arrangements are constraining the energy transition outlined in Victoria’s Gas Substitution Roadmap.
Proposal
On 8 September 2021, the Australian Energy Market Commission (AEMC) received a rule change request from the Victorian Minister for Energy, Environment and Climate Change to include distribution connected gas facilities in the Victorian Declared Wholesale Gas Market (DWGM). The request seeks to change Part 19 of the National Gas Rules (NGR) in order to allow the market participation of such facilities. By changing relevant definitions within the National Gas Rules (NGR) the Victorian Government can implement the participation of distribution connected facilities in the DWGM whilst maintaining the fundamentals of the current market design. The rule change request also aims to develop the regulatory changes required to support some decarbonisation initiatives by the Victorian Government to reach net zero emissions by 2050.
Stakeholder Engagement
The AEMC sought stakeholder views on the proposal through a consultation paper on 21 October 2021. The intent of the paper was to ensure that the rule change would be likely to contribute to the national gas objective (NGO). Overall, stakeholders supported the participation of distribution connected facilities in the DWGM, considering it a transparent and efficient outcome.
The AEMC has prepared a draft determination based on the initial consultation and associated analysis, and is now undertaking public consultation on this draft. Input can be provided via the following link between 31 March 2022 and 19 May 2022: DWGM distribution connected facilities | AEMC
Assessed RIS outcome
Compliant Consultation RIS