Since this web page was published, the Wholesale Electricity Market (WEM) Rules have been renamed the Electricity System and Market (ESM) Rules, and the Electricity Industry (Wholesale Electricity Market) Regulations 2004 (WEM Regulations) have been renamed the Electricity Industry (Electricity System and Market) Regulations 2004 (ESM Regulations). Changes have not been made to this web page to reflect this updated name.
The Coordinator of Energy (Coordinator) is conducting the Wholesale Electricity Market (WEM) Investment Certainty (WIC) Review, in consultation with the Market Advisory Committee (MAC), under clause 2.2D.1 of the Electricity System and Market (ESM) Rules.
The WIC Review includes a package of WEM reform initiatives announced by the former Minister for Energy on 9 May 2023 and aims to ensure that the WEM provides incentives for sufficient new renewable generation capacity, while maintaining system security and reliability, and without unduly increasing the cost to consumers.
The Market advisory Committee (MAC) established the WIC Review Working Group to support the Review. Papers and detailed minutes of the WIC Review Working Group meetings are published on the WIC Review Working Group webpage and the relevant MAC papers and minutes are available on the MAC webpage at Market Advisory Committee.
At the 24 July 2025 MAC meeting the MAC supported engaging the WIC Review Working Group to assist with the Coordinator’s review of the Benchmark Capacity Providers in the Reserve Capacity Mechanism. Details about this review are available here
Consultation on Initiatives 1 and 2 has closed as outlined below. Consultation on Initiatives 4 and 5 will re-commence in due course.
Initiatives 1 and 2
Show moreEPWA has completed consultation with stakeholders on Initiatives 1 and 2 of the WIC review:
- Initiative 1: Reviewing the Reserve Capacity Price (RCP) curve to determine if it needs to be adjusted to send sharper signals for investment when demand for new capacity is stronger; and
- Initiative 2: A 10-year RCP guarantee for Flexible Capacity and new technologies, such as long-duration storage.
Wholesale Electricity Market Amending Rules to implement Initiative 1
The RCP sets the amount Facilities get paid per megawatt (MW) of Capacity Credits they are assigned. Under the current RCP curve, no additional investment signal is provided in the event of a capacity shortfall as the RCP is at the price cap at the Reserve Capacity Target. Conversely, the RCP goes to zero in the event of capacity oversupply.
Initiative 1 seeks to ensure that: a sharper signal for investment in new capacity is provided during a capacity shortfall;
- customers are not overpaying for capacity when the Reserve Capacity Target is met by setting the RCP at the benchmark price;
- the capacity price floor is set at 50 per cent of the RCP in the event of capacity oversupply (i.e. not at zero). This is to provide investors with revenue certainty to enable them to make an investment decision, while also ensuring that customers are not overpaying for capacity during a capacity surplus;
- volatility of RCP is reduced by ensuring that a single Facility build, or retirement, cannot cause the RCP to move around the target; and
- there is an investment signal for Flexible Capacity, even in the event of a shortfall in Peak Capacity.
Wholesale Electricity Market Amending Rules to implement Initiative 2
Initiative 2 seeks to allow the following Facilities to receive (upon request) a fixed RCP for 10 years:
- any new Facility providing Flexible Capacity in Capability Class 1, to incentivise an early investment of new gas plant;
- any new firm generation or storage Facility using a renewable energy source in Capability Class 1 and Capability Class 2; and
- any new long-duration storage Facility that can provide firm output for the longest forecast ESR Duration Requirement over the ten-year horizon in the Electricity Statement of Opportunities (ESOO) published in the Reserve Capacity Cycle in which it requested the fixed RCP.
- A 10-year period of fixed RCP for proponents of new flexible and firming technologies, such as new gas plant and long-duration storage is expected to incentivise investment in these technologies which will allow more renewable energy to connect.
A Consultation Paper set out the findings and proposals regarding Initiatives 1 and 2 and was subject to public consultation in July 2024. The Consultation Paper is available above and submissions received are available below.
The WIC Review (Initiatives 1 and 2) Consultation Paper Submissions
The final Review Outcomes for Initiatives 1 and 2 are set out in the WIC Information Paper (Initiatives 1 and 2) which is available below.
The Exposure Draft of WEM Investment Certainty and Reserve Capacity Mechanism (RCM) Review Amending Rules to implement the Review Outcomes for Initiatives 1 and 2 of the WIC Review underwent public consultation late 2024 and is available here.
The Exposure Draft contained two parts:
- Part 1 contained the draft WEM Amending Rules which implement the review outcomes for Initiatives 1 and 2 of the WIC Review outlined in the Information Paper; and
- Part 2 outlined the draft WEM Amending Rules outlining proposed changes to the WEM Amendment (Reserve Capacity Reform) Rules (RCM Reform Rules) to address issues identified by EPWA, in consultation with AEMO, during the re-sequencing of the RCM Reform Rules that required further consultation.
- This included further changes to the determination of the Individual Reserve Capacity Requirement (IRCR) of Associated Loads that are part of a Demand Side Programme dispatched during an IRCR Interval, which were previously consulted on in the Exposure Draft of the IRCR adjustment for Associated Loads Amending Rules.
Stakeholder submissions received are available below.
Stakeholder feedback was considered and EPWA’s response to submissions received is available below.
Response to Submissions
Exposure Draft of WEM Investment Certainty and RCM Review Amending Rules - Submissions
The ESM Rules implementing the Review Outcomes for Initiatives 1 and 2 of the WIC Review were included in the Wholesale Electricity Market Amendment (RCM Reviews Sequencing) Rules 2025. The Rules were approved by the Minister for Energy on 9 January 2025 and published in the Government Gazette on 14 January 2025.
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