Department/Agency
Australian Energy Market Commission
Topic
Energy
Type
Ministerial Forum / Standard Setting Body
Announcement date
2/12/2021
Announcement
https://www.aemc.gov.au/rule-changes/compensation-market-participants-affected-intervention-events
Problem being addressed
The Australian Energy Market Operator (AEMO) is able to intervene in the market for reliability purposes (e.g. in the event of a breach of the reliability standard) or for power system security purposes (e.g. to maintain voltage). There is a risk that participants affected by such intervention events that trigger intervention pricing could be under-compensated under the current arrangements.
Proposal
To amend the National Electricity Rules to:
• incorporate frequency control ancillary services (FCAS) into the compensation framework as an automatic, two-way process, meaning participants are compensated if they are worse off due to an intervention and have to repay gains if they are better off. This acknowledges the important role of FCAS providers in the National Electricity Market;
• introduce a volume-weighted approach to calculate energy compensation for market customers with scheduled loads, which addresses the potential for these participants to be under-compensated for losses under the current arrangements; and
• articulate the objective of the compensation framework for all participant types and require AEMO to publish a methodology describing how compensation is calculated. This increases transparency where it is currently limited.
Assessed RIS outcome
Compliant with RIS requirements