Proposal to Reduce Gate Closure for Balancing Market

Balancing Market

Jun 14
Proposal to Reduce Gate Closure for Balancing Market

Perth Energy submitted a rule change proposal “Implementation of 30-Minute Balancing Gate Closure” (RC 2017 02) on 4 April 2017.  Perth Energy is seeking to reduce the gate closure for bidding into the Balancing Market in WA’s Wholesale Energy Market (WEM).  They are seeking a reduction from the current two hours ahead to no more than 30 minutes ahead of real time.  The proposal also allows for the Australian Energy Market Operator to determine a shorter gate closure provided it occurs no earlier than 30 minutes before real time.

Shorter gate closure is part of the overall reform proposals put forward by the Electricity Market Review (EMR) in relation to reform of the Wholesale Electricity Market.  Perth Energy has identified that this reform can go ahead independently of the status of the overall EMR programme and provide immediate benefits to the WEM in the form of increased accuracy of information being available to participants when submitting their bids.  Perth Energy has estimated the potential benefits of this reform to be around $50 million per year.

The proposal is progressing through the standard rule change consultation process and is one of the very first rule change proposals to be considered by the recently formed Rule Change Panel.  First round consultations closed on 12 June with 6 responses were received.  AEMO advised in its response that it would be possible to reduce gate closure to 90 minutes without significant costs, but that any shorter gate closures would require more fundamental (and costly) changes to systems.

The Rule Change Panel will provide a draft decision on 25 July with a further four week consultation period before making a final decision.