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AEMC Release Direction Paper for 5-minute Settlement Period


Source: Australian Energy Market Commission 11 April 2017

In a directions paper released today, the Australian Energy Market Commission has outlined the impacts of changing the settlement period for the electricity spot price from 30 minutes to five minutes.

AEMC Chairman John Pierce said the proposed change would signal more accurately the value to consumers of fast response technologies, such as aggregating distributed storage, new generation gas peaker plants and rapid demand response, which are needed to support the increasing penetration of intermittent wind and solar generation in the sector.

“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.

“It’s essential that we have mechanisms that appropriately value the contribution of different generation sources to the long term interests of consumers, not only using the technologies of today – but the technologies of the future,” Mr Pierce said.

”We are now calling for public submissions to provide more detailed evidence on the costs and benefits of this fundamental change to the design of the national electricity market.”

A move to five minute settlement would align the physical electricity system – which matches demand and supply every five minutes – with the price signal provided by the spot market for that five minute period.

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