AER requests fast track consideration of proposed rule change to address system security

The Australian Energy Regulator (AER) has proposed a change in the energy rules that would stop semi scheduled generators from turning off without instruction from the market operator.

Semi scheduled generators include wind and solar plants that are reliant on weather conditions to operate.

The rule change follows a request from the Council of Australian Governments’ Energy Council in March 2020 to develop rule changes for semi scheduled generators to improve their functioning within the National Electricity Market (NEM).

AER Chair Clare Savage said the proposed rule change would enable the Australian Energy Market Operator to more effectively manage system security.

“If the sun is shining and the wind is blowing then the market operator needs semi scheduled generators to produce the energy they say they will. As is the case for other types of generation, semi scheduled generators should not be able to just turn off in the face of low or negative prices without proper notification.

“We worked very closely with wind and solar operators and the market operator, and consulted widely with industry to ensure this rule change would work and retain flexibility for semi scheduled generators to fully use the available wind and sun whenever there is room on the network.

“Semi scheduled generation is already a major part of our energy mix and it is going to keep growing.

“By making the rules clear that semi scheduled generators must generate in line with their wind or solar resource, the Australian Energy Market Operator can more effectively manage electricity system security.

“With this change, the Australian Energy Market Operator will have greater confidence in the output of these generators which improves the security of our energy system without creating an unnecessary disruption or unfairly impacting renewable generators,” said Ms Savage.

There are 96 semi scheduled units operating in the NEM and when their capacity is added to that being built right now it’s around 11,000 megawatts.

This represents about 20 per cent of the 56,000 megawatts of generating capacity in the NEM and is forecast to grow to around 56 per cent of the installed capacity in the NEM by 2035.

The AER is now hopeful that this extensive consultation will enable the Australian Energy Market Commission to fast track consideration of the proposed rule change.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future. 

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland.
  • We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.
Issued date: 
30 September 2020
AER reference: 
NR 33/20
AER Media 0466 409 921