Australian electricity and gas markets – June 2024 Update
04 July 2024
Stakeholders should note the market updates below, and note any impacts on their compliance obligations.
On 3 June 2024, the Australian Energy Market Commission (AEMC) received three rule change requests from the Minister for Climate Change and Energy concerning the development of the Integrated System Plan (ISP) under the National Electricity Rules (NER) and National Gas Rules (NGR). These requests follow the work of the Energy and Climate Change Ministerial Council (see here and here), and seek to improve the robustness of the ISP's forecasts by:
1. expanding the ability of the Australian Energy Market Operator (AEMO) to analyse gas market information as an ISP input. To do so, the Better Integrating Gas into the Integrated System Plan rule change request proposes amendments to the NER and NGR that would:
respectively.
2. improving the quality of the analysis underpinning AEMO's demand projections and its assessment of the additional utility-scale generation required to meet that demand. The Improving consideration of demand-side factors in the Integrated System Plan rule change request suggests a series of amendments to the NER that would require AEMO to:
3. elevating the importance of community sentiment within the ISP by obliging AEMO, under the NER, to have regard to known community concerns when developing transmission expansion options (see the Incorporating community sentiment towards transmission expansion options in the Integrated System Plan rule change request).
A joint consultation paper was published on 20 June 2024 regarding the above rule change requests.
Stakeholders are invited to submit feedback by 18 July 2024.
On 20 June 2024, the AEMC released a consultation paper in response to the Minister's rule change request to establish cyber security as one of AEMO's responsibilities under the NER. The rule change request proposes to explicitly reference cyber security in the NER (as it relates to power system security), and impose additional cyber security preparedness functions upon AEMO including coordinating a NEM cyber incident response plan, supporting preparedness and providing advice, and distributing critical cyber security information to participants.
Stakeholder feedback is sought by 18 July 2024, with a draft determination set to be published on 26 September 2024. For more information or to make a submission, see here.
Also on 20 June 2024, the AEMC published a draft determination and more preferable draft rule as part of its Providing flexibility in the allocation of interconnector costs rule change project. The draft rule proposes amendments to the NER that would allow different jurisdictions to agree on the cost allocation for new regulated interconnectors, as well as providing a pathway for implementation of interconnector costs allocation agreements.
The AEMC invites written submissions by 1 August 2024. For more information on this rule change project, see here.
On 27 June 2024, the AEMC released its final determination and final rule on its Enhancing investment certainty in the R1 process rule change. The final rule introduces a series of amendments to the NER to improve investment certainty in the pre-connection registered data (R1) process. Specifically, the final rule:
The final rule takes effect from 11 July 2024.
On 20 June 2024, the AEMC published a final report for its Review into the arrangements for failed retailers' electricity and gas contracts project. Following the unprecedented number of retailer failures in 2022 and 2023, the review makes recommendations to simplify and improve gas directions under the Retailer of Last Resort (RoLR) scheme and improve the scheme for electricity and gas RoLR events.
These recommendations largely involve amendments to the National Energy Retail Law (NERL). For a summary of the anticipated benefits of such recommendations, see here and here.
On 26 June 2024, AEMO published its 2024 Integrated System Plan, outlining an updated 25-year roadmap for the transition of the NEM to net-zero by 2050. The 2024 ISP makes several key findings:
For more information, see here and here.
On 27 June 2024, the AEMC Reliability Panel released a final report in its Review of the form of the reliability standard and administered price cap (APC). The Panel's final recommendation is to maintain the current form of both the reliability standard and APC.
Authors: Dale Gill, Partner; Andre Dauwalder, Counsel; Alexandria Brown, Lawyer; Murray Rissik, Graduate and Nicholas Buntain, Seasonal Clerk.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.