AEMO have submitted a contingency plan to the Australian Energy Market Commission (AEMC) for consideration. Although AEMO is on track to meet the planned 1 October start date, it has submitted a rule change request as a precautionary measure.
The 5-minute settlement is a major market reform that brings 5-minute settlement in line with 5-minute dispatch. From 1 October 2021, the electricity spot market will settle every 5 minutes rather than in 30-minute intervals where it currently occurs. The changes to the market have impacted many parts of the electricity sector including generators, retailers, and network providers. This has resulted in new systems being implemented to accommodate the changes.
The AEMC has been asked to rule on a proposed contingency plan to account for an event where there is a delay to the implementation of 5-minute settlement resulting from late issues occurring with major IT change projects.
AEMC has prioritised this request because going live with 5-minute settlement before AEMO or industry can meet essential capability requirements would be a threat to the market.
AEMO will advise the market by the 1st of September if there is any cause for delays. If delays are not flagged, a new rule will not be made, and the 5-minute market will go live on 1 October. AEMO will consult with industry on the impact of AEMO’s three proposed alternate start dates. The final ruling will be live by 30 September if a change is required.
AEMO has identified two scenarios under the contingency plan. The first option is a short delay until 1st December 2021, and the second and third options are longer delays until either 1st February or 1st April 2022.
As the implementation of the 5-minute market required changes to the national electricity rules (NER), any changes to these rules, because of different start dates due to delays needs to be approved through the AEMCs rule change process.
The impact of these delays has a knock-on effect for different parts of the industry, the Commission noted that any new start date could change the timetable for other, linked reforms and affect existing market contracts for 5-minute settlement. The commission will make a decision on proposed alternative start dates with that in mind.
The AEMC have asked for submissions to the rule change request and will be open until 2 September. A public forum on the issue will be held on 9 August.