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Energy market rule change to boost batteries and hamper gas


Source: Financial Review 12/4/2017

A shift to a five-minute settlement in the National Electricity Market will help battery companies and may reduce price volatility, an increasing concern as intermittent renewable energy replaces coal and gas.

But it will disadvantage gas generators, which depend on the existing 30-minute settlement period to get into the market at times of tight supply, and some retailers fear this could also reduce the availability of hedges - "$300 caps" - which they rely on to manage wholesale price volatility.

The Australian Energy Markets Commission says in a new directions paper that its preliminary view is that the market should move to five-minute settlement over a three-year transition period but it wants to consult the industry about the potential costs of the move.

AEMC chairman John Pierce said the proposed change would signal more accurately the value to consumers of "fast response" technologies such as distributed battery storage, new generation gas peaker plants and rapid "demand response".

"With more wind and solar generation, along with the retirement of thermal generators like Hazelwood, there is an increasingly important role for flexible and fast response generation and services," said AEMC chairman John Pierce.

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