Major reforms have been introduced to the National Electricity Market (NEM) to improve market efficiency, competition and consumer benefits.
Chief Executive (CEO) of the Australian Energy Market Operator (AEMO), Daniel Westerman said the reforms included Five Minute Settlements (5MS), Wholesale Demand Response (WDR) and two-day retail switching.
“From 1 October, 5MS will reduce the wholesale electricity spot market settlement period from 30 minutes to five minutes, matching the electricity dispatch periods,” Mr Westerman said.
“As one of the most significant reforms since the NEM’s inception in 1998, 5MS provides better price signal for investment in fast response and flexible technologies, such as batteries and gas-peaking generation,” he said.
“Over time, improved price signals should lead to more efficient decisions by generators lowering wholesale costs which make up around one third of a typical bill.”
Mr Westerman said the time for consumers to change electricity retailers had been reduced from up to three months to two days.
The CEO said the development of the AEMO’s two-day retail switching framework followed a recommendation from the Australian Competition and Consumer Commission’s (ACCC) 2018 Retail Electricity Pricing Inquiry.
“Faster switching between energy retailers removes a frustration, enabling customers to transition to better electricity offers, access new services and provide retailers with a more streamlined process,” he said.
Mr Westerman said WDR would be available from 24 October and would allow large commercial and industrial businesses to bid and schedule a reduction in electricity consumption for payment.
The AEMO’s one-page factsheet on 5MS can be accessed at this PS News link.
