Transmission loss factors

COAG Consultation Regulation Impact Statement – Australian Energy Market Commission

On 14 November 2019, the Australian Energy Market Commission (AEMC) released a draft rule determination for the National Electricity Amendment (Transmission loss factors) Rule to provide the Australian Energy Market Operator (AEMO) with greater flexibility to refine and improve the methodology to determine marginal loss factors. The AEMC also released a corresponding Draft National Electricity Amendment (Transmission loss factors) Rule 2019 for consultation.

This draft rule complements the recent changes the Commission has made to the National Electricity Rules (NER) on improving the transparency of new generation projects. It also supports AEMO's work to improve the transparency and predictability of loss factors. Together, these changes are in the long term interest of consumers as they will enable better, more informed decision-making for prospective investors of generation assets. Additionally, existing market participants will have more transparency and information for the operation of existing assets.

Specifically, the draft rule:

• removes the requirement that the inter-regional loss factors must be calculated using a regression analysis, enabling AEMO and stakeholders to consider and test the performance of alternative calculation techniques.
• removes the requirement that marginal loss factor values must be based on a 30 minute interval to allow greater time periods to be used as the basis for calculating marginal loss factor values.
• removes the requirement that market network service providers be treated as invariant in the calculation of marginal loss factors so that AEMO can forecast variable market network service provider behaviour in its modelling.

The draft determination has been assessed by the Office of Best Practice Regulation as compliant with requirements for a Council of Australian Governments Consultation RIS.

Submissions are invited by close of business, 16 January 2020. More information on the consultation process, including how to make a submission, can be found here.

Please note: the draft determination is web accessible in PDF only and any accessibility queries should be directed to the Australian Energy Market Commission.

To provide the Australian Energy Market Operator (AEMO) with greater flexibility to refine and improve the methodology to determine marginal loss factors.

Published: 14 November 2019