The AEMC and its energy market body colleagues have designed a plan to adjust for the COVID-19 crisis while protecting the important energy market reforms already underway.
The COVID-19 power plan announced today by the AEMC, Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) will ease regulatory pressure on industry and strike a balance on what work needs to continue, what can be slowed down and what can be deferred.
“Our three organisations have been working very closely together and thinking ahead when it comes to protecting consumers and supporting industry at risk from COVID-19,” said AEMC Chair John Pierce in a statement today.
“This plan’s top priorities are power system security and projects that support consumers and keep industry financially viable. But at the same it is designed to protect the most important energy market reforms already underway. This is so we can continue to deliver a cheaper, fairer, lower emissions power sector for consumers.
The COVID-19 power plan has been sent to industry for feedback and will be finalised at the end of April. Stakeholder workshops to discuss the plan on prioritising the timeframes are being planned for next week.
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Among the major reforms to continue are:
- Five-minute settlement being progressed within AEMO but a proposed start date for industry delayed by a year to delay costs for industry during the pandemic.
- Interim reliability and security initiatives as agreed at March COAG Energy Council
- Work on developing a two-sided market, reforming access to the grid and introducing demand response mechanism into the market.
- Progressing two recent rule changes critical to power system security:
“It is important to stress that AEMO’s own work on implementing the critical five-minute settlement reform will not stop,” Mr Pierce said.
“We recognise this market reform is critical to rewarding fast-response energy generation like batteries, demand response providers and new generation gas peaker plants. But it does require a large-scale IT response by the industry.
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“By pausing requirements on industry for 12 months we hope to take the financial pressure off during this economically challenging time. And while this will postpone the start date of 1 July 2021, it will mean we can still pick up the baton post-pandemic because AEMO will have done its preparatory work.
“But we do want to hear from industry about the timing outlined in the plan and look forward to discussing these after Easter.”
Each of the decisions to progress, pause or extend timeframes outlined in the plan was made subject to a set of mutually agreed criteria. The objectives and criteria for prioritising are also outlined in the document.
For work that is flagged to progress, the energy market bodies will explore ways to be flexible so stakeholders can actively engage. Market participants having problems with compliance are encouraged to contact the AER at an early stage. .
The three bodies will also collaborate on which regulatory work can be grouped so that implementing change can be more coordinated and therefore cheaper.
“The AEMC also has the ability to extend statutory timeframes for rules on foot to ease demands on industry resources,” Mr Pierce said.
Further details about next week’s workshops will be made available shortly.