Australian electricity and gas markets - January 2024 update

In our January update, we take a look at the latest rule changes and market updates affecting participants in the Australian electricity and gas markets.

National Electricity Rules

On 18 January 2024, the Australian Energy Market Commission (AEMC) initiated the following rule changes:

• Resetting Powerlink's system strength unit process (SSUPs), publishing a consultation paper and indicative draft rule. SSUPs are a component of the system strength charge that, under the National Electricity Rules (NER), must be fixed for each five year system strength charging period. Powerlink published its current SSUPs in March 2023 and now considers that the costs that it used to calculate the SSUPs could be materially lower. The proposed rule change would enable Powerlink to reset its SSUPs for the current system strength charging period, provided they are lower than the original SSUPs. The AEMC is seeking stakeholder feedback on the consultation paper and indicative draft rule by 15 February 2024; and
• Expanding the transmission ring-fencing framework. The rule change request proposes to expand the transmission ring-fencing framework to include negotiated transmission services. The AEMC will fast track this proposal as the Australian Energy Regulator (AER) consulted on its nature and content in its May 2023 review of options to address gaps in the transmission ring-fencing framework. The AEMC invites stakeholder engagement before it publishes the draft rule determination.

National Energy Retail Rules

No retail rule change requests were initiated in January. No AEMC determinations relevant to the National Energy Retail Rules were published.

National Gas Rules

No gas rule change requests were initiated in January. No AEMC determinations relevant to the National Gas Rules were published.

Other Updates

On 5 January 2024, the Australian Energy Market Operator (AEMO):

• initiated its 2024 Reliability Forecast Guidelines Consultation, publishing a consultation paper. The Reliability Forecast Guidelines explain to liable entities and other interested parties how reliability forecasts are prepared and how AEMO will implement the Forecasting Best Practice Guidelines produced by the AER. Interested persons are invited to make submissions on the paper by 5 February 2024;
• released its 2023 Forecast Accuracy Report (FAR) and 2023 Forecast Improvement Plan as part of its 2023 Forecast Improvement Plan consultation. The report primarily assesses the accuracy of the forecasts in AEMO's 2022 Electricity Statement of Opportunities for each region in the National Electricity Market (NEM). Based on these observations, AEMO proposes a number of  forecast improvements. Submissions on the Draft 2023 Forecast Improvement Plan are invited by 5 February 2024; and
• initiated its Consultation on Forecasting Accuracy Report Methodology publishing a consultation paper. The report focusses on AEMO's longer term demand and supply forecasts for reliability/planning purposes and the methods used to assess their accuracy. AEMO is seeking feedback on the consultation paper and invites submissions by 5 February 2024.

On 15 January 2024, the AER completed its transparency review of AEMO draft 2024 Integrated System Plan, releasing a review report assessing how key inputs and assumptions contributed to AEMO’s draft 2024 ISP outcomes. The review concludes that AEMO has adequately explained most of its inputs and assumptions and identifies several aspects of the draft Integrated System Plan where AEMO could better explain how key inputs and assumptions contribute to the draft ISP outcome.

AEMO's engagement goal for the 2024 ISP is to provide stakeholders with appropriate time and opportunity to enable meaningful input in their planning. For more information on 2024 ISP Engagement Opportunities see here.

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Authors: Andrew Dauwalder, Counsel; Samirah Delor, Graduate; Murray Rissik, Paralegal