The Australian Energy Market Commission’s decision to put off changing the settlement period for the electricity spot price has been slammed by leading experts, who say the delay will reinforce the position of incumbent fossil fuel generators and delay the entry of crucial new technologies.
The rule change, that would cut the settlement period for the electricity spot price from 30 minutes to five minutes, has been campaigned for strongly by many in the market, as a development that could underpin massive investment in battery storage in Australia.
And while the AEMC has finally agreed to back its recommendation, it has also determined to put off the rule change until July 2021, at the earliest.
“New technologies are required urgently in response to increasing rates of failure of conventional power systems, increased intensity of extreme weather events and increasing roles for intermittent generation,” said Professor Ross Garnaut, the eminent economist, in an emailed statement to RenewEconomy.
“Confirmation of the delay in introduction of 5-minute pricing would be a setback for energy security and low energy costs, and for timely transition to a low carbon economy,” he said.
“Battery technology and renewables are being deliberately hobbled by the incumbent’s vested-interest resistance,” said The Australia Institute director Ben Oquist, in a separate statement.
“While it’s welcome that the AEMC has finally acknowledged that we need this important rule change, 2021 is an unacceptable delay. The Australian electricity market needs fixing now, and a 5-minute rule will help provide cheaper, more reliable energy.”
Other market participants, however, have suggested the AEMC is justified in the delay, if only because it would be impossible to unwind the significant hedging positions and contracts which make up the bulk of the wholesale energy market.
Submissions on the Five Minute Settlement draft determination close on 17 October 2017.
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