Retailer Reliability Obligation triggered in South Australia

The SA Government (South Australian Minister for Energy and Mining) has the power (under South Australian Legislation) to trigger a Retailer Reliability Obligation (RRO) upon informant from AEMO of a one-in-two year peak demand forecast shortfall event as published in the South Australian Gazette 17 December 2019, with the AER confirming and publishing the notice 9 January 2020. For the avoidance of doubt this means that unlike all other regions which require the Electricity Statement of Opportunity (ESOO) to predict an unserved energy event, SA can act independently without approval as such from the AER.

The RRO was trigged for South Australia on the 9 January 2020 for the following periods:

  • First Quarter (Q1) for Calendar Year 2022
  • First Quarter (Q1) for Calendar Year 2023.

The periods of concern according to AEMO’s forecasting includes:

  • each weekday from 10 January 2022 – 18 March 2022 for the trading periods between 3pm and 9pm EST;
    • **(Peak demand expected to be 3,030 MW)
  • each weekday from 9 January 2023 – 17 March 2023 for the trading periods between 3pm and 9pm EST
    • **(Peak demand expected to be 3,046 MW)

A T-3 Instrument has been created and the Market Liquidity Obligation (MLO) of the SA region’s largest generation businesses, Origin, AGL and Engie have been called upon and are to begin trading exchange-listed (ASX approved products) for Q12022 and Q12023 from 7 February 2020.

With the triggering of the RRO, the South Australian Minister has made a T-3 instrument (under NEL Part 7A 19B (1)):

  • Q1 2022: This T-3 Reliability Instrument applies to the South Australian region of the National Electricity Market for the trading intervals between 3pm and 9pm Eastern Standard Time each weekday during the period 10 January 2022 to 18 March 2022 inclusive. The Australian Energy Market Operator’s one-in-two year peak demand forecast for this period is 3,030 Megawatts.
  • Q1 2023: This T-3 Reliability Instrument applies to the South Australian region of the National Electricity Market for the trading intervals between 3pm and 9pm Eastern Standard Time each weekday during the period 9 January 2023 to 17 March 2023 inclusive. The Australian Energy Market Operator’s one-in-two year peak demand forecast for this period is 3,046 Megawatts.

With the T-3 instrument created by the SA Energy Minister, this has triggered the MLO, effectively a market making obligation on the parties identified above to reasonably offer liquid exchange-listed products for the identified shortfall periods.

Obligated MLO participants such as Origin, AGL and Engie will from 7 February 2020 begin offering exchanged-listed products for both Q12022 and Q12023.

The triggering of the RRO means retailers and large load consumers can start procuring volume for their forecast demand for Q12022 from as early as 7 February 2020, and no later than 31 December 2020, the T-1 instrument implementation date (13 months prior to the shortfall period identified). 

If you would like to know more, please contact Edge on 07 3905 9220.

Semi-scheduled and Intermittent Non-scheduled Generators urged to advise of De-ratings

A new market notice within the National Electricity Market (NEM) posted by the Australian Energy Market Operator (AEMO), one we have not see before was issued to all market participants on the 23/12/19. The market notice requested and served as a reminder for all semi-scheduled and intermittent non-scheduled generators to ensure they update their market availability bids, update their SCADA Local Limit or, if unavailable, advise AEMO control room to implement a quick constraint to the reduced available capacity level; and update intermittent generation availability in the EMMS Portal to reflect reduced plant availability as is required under the National Electricity Rules (NER), per NER 3.7B(b).limits.

This was an interesting constraint for AEMO to issue as it was due to extreme heatwave conditions across the south east coast of Australia, and as with most generating plant, under extreme heat, some form of derating on its physical capacity and output can occur. On the 23/12/19 AEMO’s weather service provider was forecasting extreme high ambient temperatures across all NEM regions, hence AEMO’s market notice to these participants to remind semi-scheduled and intermittent non-scheduled generators to advise AEMO of any reduction in available capacity caused by temperature derating.

Particularly interesting is that the often “set and forget” approach to renewable generators such as solar and wind generators, as classified by AEMO as semi-scheduled generation is being watched with greater scrutiny, particularly after the events of 2016 in SA where a state wide blackout was triggered by a severe weather, damaging more than 20 towers, downing major transmission lines, and with multiple wind farms currently shouldering some of the blame for the state going black due to the wind farms switching off when the transmission lines went down.

Semi-scheduled: A generating system with intermittent output (like a wind or solar farm), and an aggregate nameplate capacity of 30 MW or more is normally classified as a semi-scheduled generator unless AEMO approves its classification as a scheduled generating unit or a non-scheduled generating unit. AEMO can limit a semi-scheduled generator’s output in response to network constraints, but at other times the generator can supply up to its maximum registered capacity (AEMO 2014).

If you have any questions regarding this article or the electricity market in general, call Edge on 07 3905 9220 or 1800 334 336.

SA Electricity Prices to be Highest in the World

Electricity retailers will increase their standard pricing from 1 July 2017 for all states in the National Electricity Market (NEM), with South Australia (SA) tipped to have the largest increase.

As part of their annual review of energy tariffs, the three biggest retailers have cited increased wholesale energy costs as the main reason for the significant increases.  The retailers say the increased wholesale costs have been caused by the closure of baseload coal-fired generation and the increased costs of gas.

Residential customers in SA will see an average increase of 19.9 per cent from EnergyAustralia, 18 per cent from AGL, and 16.1 per cent from Origin Energy.  Experts are concerned that household prices in SA are set to be the highest in the world, putting immense pressure on the household budget.

In today’s ever-increasing energy market, it is important to get to know your energy usage.  Edge’s tips for residential and small to medium business customers are:

  • Understand your consumption. E.g. Do you need smart metering?
  • Are you on the right tariff? Changing tariffs could save you hundreds of dollars per year.
  • Shop around. There are a number of retailers offering discounts of varying levels.  It’s important you are comparing apples with apples.

If you’re a small to medium business and want to take a proactive approach to your electricity contracts, contact Edge Utilities here.

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