The AER today published its Final Decision and revised Rebidding and technical parameters guideline. The changes made to the Guideline reflect recent market developments and the commencement of the False or Misleading and Ramp Rate rule changes on 1 July 2016. Our Final Decision considers the feedback we received from stakeholders throughout our consultation process.
This Guideline sets out the information that generators selling electricity in the wholesale market must provide when they change their offers through submitting a rebid. It also outlines our approach to compliance monitoring in this area (including aspects of the July 2016 rule changes) and our process for requesting additional information if required. Publishing guidelines is an important part of our role in helping industry understand and comply with its obligations.
Over 300 generators produce electricity for sale into the wholesale market. Generators make bids (offers) to supply quantities of electricity across price bands for each five minute dispatch interval in a day. They must lodge offers ahead of a trading day but can rebid at any time. Various factors can affect generator bids, including plant technology, outages and transmission network constraints that limit transport capabilities. The Australian Energy Market Operator (AEMO) operates the national electricity market by matching generator supply offers against real time electricity demand. When generators change their offers they must submit a rebid, and the reason for the rebid, to AEMO. The AER monitors compliance with the rebidding requirements in the wholesale electricity market to ensure generator rebids are compliant with the Rules.
In a decentralised self-commitment market like the National Electricity Market, transparency is key to promoting efficient outcomes. The rebidding rules set out the framework with which generators are required to comply to ensure other participants have sufficient opportunity to react to changes in the market (including other rebids) in a fair and equitable manner.
The revised Guideline takes effect from today.
The AER monitors and reports on wholesale electricity markets. The AER’s role in monitoring wholesale energy markets, including its reports on high price events, helps to enhance market transparency and compliance. Our analysis also provides a foundation to detect non-compliance, market irregularities, inefficiencies and consumer harm. We draw on this work to advise the COAG Energy Council, other stakeholders and market bodies on wholesale market issues.
Energy retailers are the main customers in the wholesale electricity market, bundling electricity with network services for sale to residential, commercial and industrial energy users.