1 minute read

NEM Settlement under low, zero and negative demand

AGL responded to the AEMC consultation paper on an urgent rule change proposal that seeks to ensure the national electricity market (NEM) can settle when regional demand is below 1 MWh.

light grey logo
AGL Energy
28 May 2021

AGL responded to the AEMC consultation paper on an urgent rule change proposal that seeks to ensure the national electricity market (NEM) can settle when regional demand is below 1 MWh. The rule will allow the Australian Energy Market Operator (AEMO) to substitute numbers into its non-energy cost allocation formulas to ensure that these will continue to calculate. These formulas rely on numerators and denominators that include adjusted gross energy (AGE), which is a customer's net flow of electricity at a connection point. AEMO notes that if the aggregate AGE for a region falls below 1 MWh for a trading interval, the non-energy cost allocation formulas in rule 3.15 cannot be solved by its market settlement systems. To address this issue, AEMO proposes to substitute a market customer's average usage from the previous four billing periods into the relevant cost allocation equations when regional demand is less than 1 MWh. This rule change is a temporary solution to ensure the NEM continues to settle and AGL supports AEMO’s proposal. 

The submission can be accessed here.