The Australian Energy Market Commission (AEMC) is seeking submissions on a rule change request that would require large electricity generators to provide at least three years’ notice before closing.
The request comes from Energy Security Board Chair, Dr Kerry Schott AO, and is based on one of the recommendations in the Finkel Panel review.
The proposed rule would enhance the information available to AEMO and the market on generator closures. This information would be included in AEMO’s medium and long-term forecasts (the MT PASA and Electricity Statement of Opportunities, respectively).
The Finkel Review recommended a policy package to achieve an orderly transition to a low emissions future. The package included putting in place notice of closure requirements for large generators to help manage the retirement of existing coal-fired generators as they reach the end of their economic lives. This would provide time for replacement capacity to be built and for affected communities to plan for change.
Since the time of the Finkel Review final report, the Energy Security Board has proposed a national energy guarantee that seeks to integrate energy and climate change policy instruments in the NEM to provide investors with the certainty they need to make long-term investments.
The AEMC’s Reliability frameworks review is also considering complementary changes to energy market design to support the Guarantee’s objective in delivering long-term reliability at least cost.
This rule change request is being progressed within this broader context, and forms part of the Commission’s reliability work program.
Submissions on the consultation paper are due by 7 June 2018.