As part of reforms to the National Energy Rules based on the 2012 Power of Choice review, the Australian Energy Market Commission has created a new rule enabling the Australian Energy Market Operator to obtain better information on demand side participation from electricity market participants. This information will be used to inform its electricity load forecasts.
Currently, AEMO conducts voluntary surveys of electricity market participants about their knowledge of demand side participation in the electricity market. It appears that the quality of information obtained from the survey method is limited, potentially impacting the quality of AEMO’s load forecasts.
The Commission’s new rule seeks to address this by requiring registered electricity market participants to provide information on demand side participation to AEMO, in accordance with guidelines. These guidelines must be developed by AEMO, in consultation with registered participants and interested stakeholders, providing these parties with an opportunity to actively engage with AEMO on the appropriate specification of the guidelines.
The information provided under the rule will be considered by AEMO when developing and using its load forecasts under the National Electricity Rules.
The publication of potentially better quality load forecasts by AEMO could better inform electricity market stakeholders of possible future outcomes. This could lead to potentially more efficient operational decisions and, ultimately, potentially more efficient investment decisions.
The final rule requires AEMO to develop and publish the guidelines by no later than 26 September 2016. A minimum three month transition period applies between the dates for publication, and commencement, of the guidelines.
This rule change is part of the Commission’s work to encourage greater demand side participation by consumers in Australia’s energy markets, based on the 2012 Power of Choice review which proposed a new framework for consumers to monitor, manage and adjust their electricity consumption.
The final rule
The final rule, which was determined as preferable to the proposed rule, requires:
- registered participants to provide to AEMO information on demand side participation, in accordance with new guidelines;
- AEMO to develop these guidelines in consultation with registered participants and other interested stakeholders, providing these parties with an opportunity to engage with AEMO on the appropriate specification of the guidelines;
- AEMO to have regard to registered participants’ costs of compliance with the guidelines compared to the likely benefits of the use of that information by AEMO for the purpose of its load forecasts under the National Electricity Rules;
- AEMO to take the information on demand side participation received into account when developing and using load forecasts under the National Electricity Rules; and
- AEMO to publish details, no less than annually, on the extent to which demand side participation information has informed the development or use of its load forecasts.
The rule also articulates the scope of required information that AEMO may specify in the guidelines
Other Power of Choice rules already made include improving customer access to information about their energy consumption and making electricity network charges more reflective of individual consumer choices about their energy use. A draft determination was also made to encourage greater competition in metering and related services. These reforms work together to give consumers more choice and control over their energy use and costs.