A draft rule to move settlement of the demand size of the wholesale electricity market to a global settlement framework has been published by the AEMC.
This is a move away from the ‘settlements by difference’ approach to settlement, which has been in place since the creation of the national electricity market.
The draft rule sets out a detailed design for global settlements, including the level at which unaccounted for energy is allocated, how to allocate unaccounted for energy, and how to treat virtual transmission nodes and unmetered loads within global settlements.
The benefits of moving to global settlements include:
- Improved transparency and accuracy of settlements – resulting in decreased costs of resolving settlement disputes and the ability to undertake technical studies to reduce unaccounted for energy
- Better incentives for retailers to minimise unaccounted for energy, such as electricity theft
- A more equal platform for competition in the retail electricity market by allocating unaccounted for energy to all retailers within each local area based on their customers’ consumption within the area.
Under the draft rule, the new global settlement framework would start on 1 July 2021. This would coincide with the start date of five minute settlement, so IT system capabilities can be developed together.
Stakeholder submissions are due by 25 October 2018.
Lauren ‘LJ’ Butler is the Assistant Editor of Utility magazine and has been part of the team at Monkey Media since 2018.
After completing a Bachelor of Media, Communications and Professional Writing at the University of Wollongong in 2014, and prior to writing about the utility sector, LJ worked as a Journalist and Sub Editor across the horticulture, hardware, power equipment, construction and accommodation industries with publishers such as Glenvale Publications, Multimedia Publishing and Bean Media Group.