Legal development

Australian electricity and gas markets – May 2024 Update

windmills

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

    What you need to do

    • Stakeholders should note the market updates below, and note any impacts on their compliance obligations

    National Electricity Rules

    On 9 May 2024, the Australian Energy Market Commission (AEMC) published a draft determination and draft rule on its Managing ISP project uncertainty through targeted ex post reviews rule change. The new rule:

    • clarifies that the Australian Energy Regulator (AER) will only conduct an ex post review on an Integrated System Plan (ISP) project once completed and if the capex incurred exceeds the project capex forecast;
    • clarifies that the AER will only conduct an ex post review on a non-ISP project where the capex incurred exceeds the capex forecast for all non-ISP projects in the review period;extends the review period for an ISP project from five years to all years in which capex is incurred for that project;
    • clarifies that the AER's power to exclude capex from a Transmission Network Service Provider (TNSP)'s regulatory asset base (RAB) for an ISP project is limited to overspend for that project; and
    • clarifies that the AER's power to exclude capex from a TNSP's RAB for a non-ISP project is limited to overspend above the capex allowance for non-ISP projects during the five-year review period.

    Interested stakeholders are invited to respond to the draft rule change by 20 June 2024.

    On 23 May 2024, the AEMC published a draft determination and draft rule on its Bringing early works forward to improve transmission planning rule change. The new rule:

    • defines the term 'early works' in the National Electricity Rules (NER);
    • enables TNSPs to submit an early works contingent project application (CPA) to the AER without first completing an RIT-T and feedback loop assessment; and
    • clarifies that the Australian Energy Market Operator (AEMO) can specify examples of early works and preparatory activities for actionable ISP projects.

    The AEMC invites stakeholders to respond to the draft rule change by 4 July 2024.

    Transmission Access Reform

    On 24 April 2024, the AEMC published its Consultation Paper on transmission access reform (TAR). This paper was published as part of an ongoing review into transmission network congestion. The proposed reforms seek to implement:

    • a priority access mechanism; and
    • a Congestion Relief Market (CRM).

    For more detail on the AEMC's paper and its implications for existing and future generation and energy storage participants in the National Electricity Market (NEM), please see our article here.

    National Energy Retail Rules

    No rule change requests were initiated in May 2024. No AEMC determinations relevant to the National Energy Retail Rules were published either.

    National Gas Rules

    No rule change requests were initiated in May 2024. No AEMC determinations relevant to the National Gas Rules were published either.

    Other Updates

    The AER is seeking stakeholder feedback on its:

    AEMO released an Update to the 2023 Electricity Statement of Opportunities on 21 May 2024. The Update reassess the supply and demand outlook for the NEM based on new information including:

    • Project EnergyConnect commissioning dates;
    • 4.6 gigawatts of additional generation and storage capacity from new projects; and
    • mothballed gas generators in South Australia.

    Authors: Dale Gill, Partner; Andre Dauwalder, Counsel; Alexandria Brown, Lawyer; Murray Rissik, Graduate and Ethan Low, Paralegal.

    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.