Electricity Market Review–Electricity Market & Ancillary Services

WEM Information

Mar 15
Electricity Market Review–Electricity Market & Ancillary Services

On 14 March 2016, the Public Utilities Office (PUO) Electricity Market Review Wholesale Electricity Market Improvements work stream published a consultation paper outlining the proposed reforms to the Wholesale Electricity and Ancillary Services Markets.  The main points in the paper include:

  • Amendments to the market design and dispatch criteria to reflect the constrained network access arrangements that will be introduced on 1 July 2018 (compared to the current firm access arrangements).  This infers that binding constraints will be explicitly factored into near real time decisions, including the formation of generation merit orders and pricing.
  • An enforced facility bidding for all participants, so generators bid into the market based on separate generating facilities rather than as a combined portfolio of multiple generation units.
  • The co-optimised clearing of both the new spot energy market and related ancillary services markets.
  • The National Electricity Market Dispatch Engine has been proposed as the basis for determining calculating dispatch algorithms for the spot market in the Wholesale Electricity Market (WEM).  This points to an intention for close alignment with the market design in the National Electricity Market (NEM).  However, WEM specific traits such as the capacity market and the Short Term Energy Market will be retained.
  • Gate closure is expected to move closer to real time and dispatch intervals are also expected to be shortened – possibly to the five minute intervals that exist in the NEM.
  • A series of supplementary changes will be required to ensure closer alignment with the NEM while also considering WEM specific requirements such as ensuring a properly functioning capacity market can continue along the proposed new energy and ancillary services market design.

Submissions on this position paper are due by 27 April 2016 and will feed into the EMR’s advice to Government in relation to these proposed reforms.