The Australian Competition and Consumer Commission issued its determination on changes to ancillary services arrangements in the National Electricity Market.
"The proposed changes introduce spot market trading arrangements for frequency control services, which balance power supply and demand over short time intervals throughout the whole system. These are the most costly of all ancillary services in the NEM," Mr Rod Shogren, Commissioner with responsibility for energy matters, said today.
"Therefore, it is essential that markets for these services operate effectively and competitively, to drive costs down, and ultimately provide cheaper energy costs to the consumer".
"Ancillary services are essential for the management of power system security, facilitate trading in the NEM, and ensure that electricity supplies are of an acceptable quality."
"The ACCC has imposed conditions of authorisation including market monitoring that targets price outcomes under the new market arrangements".
Other issues discussed in the determination include:
- the complexity and competitiveness of the proposed frequency control markets
- risk management and cost allocation
- ongoing contract arrangements between the National Electricity Market Management Company (NEMMCO) and service providers for network control and system restart services.