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National electricity amendment (generator three year notice of closure) rule 2019: rule determination

8 Nov 2018
Description

The Australian Energy Market Commission (Commission) has made a final rule that promotes reliability in the national electricity market (NEM). It does so by creating a framework that requires generators to provide AEMO the expected closure year for all their scheduled and semi-scheduled generating units. It also requires them to provide AEMO at least three years’ notice of their intention to permanently close a generating unit by notifying the date they wish to terminate the classification of the generating unit. The rule permits a generator to provide its first notice of closure with less than three years notice in circumstances where an exemption has been granted by the AER. It also requires an amended notice of closure to provide no less than three years notice from the date the amended notice is provided, unless the closure date extends a previous closure date, or an exemption has been granted by the AER. The provision of this information to the market will assist in managing the market impacts of the retirement of the existing coal-fired generators as they reach the end of their economic lives.

The rule also provides the Reliability Panel with discretion to identify specific energy constraint scenarios to be included for study for the purposes of preparing the Energy Adequacy Assessment Projection (EAAP). This will broaden the nature of input AEMO receives in considering possible energy constraint scenarios and their impact on generation adequacy.

This final rule is made in response to a rule change request from Dr Kerry Schott AO, the Chair of the Energy Security Board. The rule change request was based on one of the recommendations of the Independent Review into the Future Security of the NEM (Finkel Review), where one of the central tenets of the report was the need for an orderly transition to a power system with a higher penetration of renewables.

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