Market Advisory Committee meetings held between January 2023 and December 2023

Key agenda items: 

WEM Investment Certainty Review including: 

• The complete emissions threshold proposal; 
• Proposals related to a ten-year RCP guarantee for new technologies 

Power System Security and Reliability (PSSR) Standards Review including: 

• Scope of Works; and 
• Terms of Reference for a MAC Working Group to support the review undertaken by the Coordinator of Energy

Benchmark Reserve Capacity Price (BRCP) WEM Procedure review Working Group: 

• Terms of Reference for a MAC Working Group to support the review undertaken by the Economic Regulation Authority

Key agenda item: 

Benchmark Reserve Capacity Price (BRCP) Reference Technology Review 

An outcome of the Reserve Capacity Mechanism Review provided for the introduction of a provision in the Wholesale Energy Market (WEM) Rules that will require the Coordinator to review the BRCP reference technologies for the Peak Capacity product and the new Flexible Capacity product. 

The BRCP Reference Technology review aims to ensure that the WEM Rules provide sufficient incentives for investment in new capacity to maintain system security and reliability at efficient cost to consumers. 

The first review of the BRCP reference technologies must be conducted to set the reference technologies before the Economic Regulation Authority reviews the BRCP Methodology and to enable the implementation of the Flexible Capacity product. 

Key agenda item:

Demand Side Response Review

The draft Demand Side Response (DSR) Review consultation paper sets out the findings and proposals arising from stage one and stage two of the DSR Review.

• Stage 1 is a high level assessment of the participation of DSR in the WEM. This assessment includes a review of DSR programs in other jurisdictions, identifying flexible loads that could participate, and identifying scenarios of possible over or under-compensation of participants.
• Stage 2 is a gap analysis identifying barriers and disincentives for DSR to participate across the various WEM components and provide the services identified in Step 1.

Key agenda items include updates on the:

WEM Investment Certainty (WIC) Review

• EPWA has developed Terms of Reference for the WIC Review for consideration by the MAC and will provide the final Scope of Works for the WIC Review.

Supplementary Reserve Capacity (SRC) Review

• EPWA will provide the MAC with an update on stage 2 of the SRC Review and provide a summary of feedback received. 

Reserve Capacity Mechanism Review Stage 2 – Information Paper
The Review Outcomes of Stage 2 of the RCM Review are presented in a draft information paper, including the outcomes for:

• Individual Reserve Capacity Requirements;
• Matters related to Demand Side Programmes;
• The Testing, Outages and Refunds regimes;
• Other matters, including the EUE Target in the Planning Criterion, and the Determination of the BRCP 
• Technology; and
• Removal of mandatory Expressions of Interest (new item).

Key agenda items include updates on the: 

Cost Allocation Review (CAR) Information Paper 

The final CAR outcomes are presented in a draft Information Paper including the final design for: 

• Frequency Regulation – amended WEM Deviation Method;  
• Contingency Reserve Lower – amended allocation method 
• Contingency Reserve Raise – treatment of facilities with multiple connections under the Runway Method; and 
• Market Fees – Energy Storage Resource costs recovery 

Scope of Works for the WEM Investment Certainty (WIC) Review 

• EPWA has developed a Scope of Works for the WIC Review for consideration by the MAC. 
• The WIC Review will consider, design and implement the following five reforms that were announced by the Minister for Energy on 9 May 2023, and which are aimed at providing further investment certainty to assist the decarbonisation of the WEM. 

1. changing the Reserve Capacity Price (RCP) curve so it sends sharper signals for investment when demand for new capacity is stronger; 
2. a 10-year RCP guarantee for new technologies, such as long-duration storage; 
3. a wholesale energy price guarantee for renewable generators, to top up their energy revenues as WEM prices start to decline, in return for them firming up their capacity; 
4. emission thresholds for existing and new high emission technologies in the WEM; and 
5. a 10-year exemption from the emission thresholds for existing flexible gas plants that qualify to provide the new flexibility service. 

Scope of Works for the MAC Review 

• EPWA has developed a Scope of Work for the MAC Review for consideration by the MAC. 
• The MAC has been operating under its current governance arrangements since July 2021 and EPWA is undertaking a review of the MAC to ensure that it remains fit for purpose. In particular, that it operates efficiently and provides balanced, timely and useful advice to the Coordinator. 

Key agenda items include updates on the: 

Reserve Capacity Mechanism (RCM) Review Working Group  

• The final design for elements of the RCM investigated in stage 1 of the RCM review are presented in an Information Paper, and the findings and recommendations  arising from stage 2 of the RCM review are presented in a Consultation paper (see RCM Review Draft Information and Consultation Paper)

Cost Allocation Review (CAR) Working Group  

• Update on revised methods to allocate costs for Frequency Regulation, and Contingency Reserve (Raise and Lower).

Supplementary Reserve Capacity Review  

• The proposed WEM Amendment (Supplementary Reserve Capacity) Rules 2023, have been submitted to the Minister for his approval, and EPWA has commenced stage 2 of the SRC Review on 1 April 2023.