Market and Governance Framework
The Market and Governance Framework work stream will establish the authorising and operating policy and procedures required to facilitate increased renewable energy generation into the system.
- Align government policies to ensure consistency with the objective of achieving the renewable energy target
- Establish a regulatory framework which supports economic investment in renewable energy and certainty for industry whilst maintaining a secure and reliable supply to consumers
- Establish appropriate electricity pricing structures which are reflective of the actual costs of delivering services and encourage the optimum uptake of renewable energy and ancillary services.
Recognise the role of energy as a key driver of economic development, founded on competitively priced and environmentally responsible electricity generation and ensure the Energy Policy and Climate Change Framework align with the renewable energy target. Related to the Roadmap to Renewables enabling action 1(a).
Establishes Government’s support and commitment for achieving its renewable energy goals and the positive impact that this can have on the economy and environment.
A government working group will also be established to ensure the electricity reform process aligns with the renewable energy target.
Establish a Reliability Standard which balances the benefit of higher reliability for customers with the costs. Related to the Roadmap to Renewables enabling actions 5(e), 6(c), and 5(f).
Establish a Reliability Manager with responsibility for determining the system-wide capacity requirement for renewable and non-renewable plant to meet the Reliability Standard.
Establish generator performance standards to accommodate increased levels of renewable energy generation on the network.
Define in detail, the requirements for ancillary services in a way that allows renewable energy generators to purchase long-term contracts for these services.
Complete the review of the proposed Frequency Control Ancillary Service (FCAS) and Inertia Ancillary Service (IAS) contained in the Secure System Guidelines to ensure they are appropriate for network stability and reliability targets.
These actions will contribute to ensuring system reliability and security as renewable energy is integrated into the system.
Amend the Secure System guidelines and System Control Technical Code or other instruments to identify and facilitate the regulatory and commercial arrangements to enable procurement of appropriate ancillary services. Related to Roadmap to Renewables enabling action 8 (d).
Will provide a level playing field and transparent process for investors entering the market.
Remove duplication and overlaps that currently exist in the Technical and Electricity Networks (Third Party Access) Codes and complete the current review of the National Electricity Rules, including the need for derogations and transitional arrangements to Chapters 5 to 10, to ensure they are appropriate for the Northern Territory and its renewable energy objectives. Related to the Roadmap to Renewables enabling actions 5(a), 5(b), and 5(d).
The NER arrangements whereby System Control will be consulted during the negotiation of a Network Access Agreement in relation to system security and reliability will be adopted.
Completion of the review will provide certainty for investors and once applied is expected to put downward pressure on prices.
Amend the Network Access Code to include a provision for System Control to be consulted on the Network Access Agreement in relation to system security and reliability. Related to the Roadmap to Renewables enabling action 8(c).
To ensure all new generators wishing to connect to the network prior to the adoption of the National Electricity Rules in July 2019, do not have a negative impact on the network.
Conduct ongoing reviews of regulatory frameworks related to electrical energy systems to ensure they can respond to technology change. Related to the Roadmap to Renewables enabling action 7(a).
Enable the system to evolve as technologies and technical requirements evolve.
Upgrade the Market Settlement System to accommodate increased activities associated with new market conditions.
The Market Operator currently utilises a macro-based spreadsheet to conduct market settlement, this system will no longer be adequate to conduct market settlement calculations. An upgrade to the system will support effective operation of the market and the anticipated increase in the number of suppliers providing generation capacity and ancillary services.
Review of the Ring-fencing Guidelines to ensure greater separation between System Control and PWC’s other business units. Related to the Roadmap to Renewables enabling action 5(c).
Provide greater independence between system control and the network service provider will reduce the perception that it is given preferential treatment over generators in its decision making.
Review the small-scale solar feed in tariff (FiT) to identify a long term transitional pathway to facilitate least cost to government, improve system security and reliability during peak periods, and provide certainty for consumers. Related to the Roadmap to Renewables enabling action 3(e).
The current peak demand is at a time when renewable solar energy is not produced. Adopting a feed-in tariff which reflects time-of-day energy generation may encourage the uptake of household battery storage which will contribute to improved network system performance.
Review regulated tariffs to identify a long term transitional pathway to better reflect the cost of generation and to align with the demand profile for the Northern Territory. Related to the Roadmap to Renewables enabling actions 7(b) and 8(f).
Appropriate tariff structures that better reflect the cost of generation, can increase consumer energy efficiency. Reduced energy consumption will lower the effective target for renewable energy integration and therefore the overall costs of meeting the target.
Complete the unbundling of the costs of ancillary services so that these are adequately compensated for and can inform decisions of proponents considering investment in large-scale renewable energy projects. Related to the Roadmap to Renewables enabling action 2(d).
Establishing the actual costs of ancillary services and communicating these to investors will contribute to developing the appropriate settings for investment in renewable energy in the Northern Territory.
Identify appropriate mechanisms to deliver ancillary and other system security services including the likely costs of such services. Related to the Roadmap to Renewables enabling action 3(d).
Clarity for generators who may be required to contract for these services in order to supply to the network.