PIAC responded to the AEMC’s consultation paper on the Reliability Panel review of the definition of unserved energy. The definition of unserved energy is an important part of the NEM framework. It is used as an input to the reliability standard which in turn forms a basis for key market settings: the market price cap, cumulative price threshold, administered price cap and market floor price.
PIAC responded to a number of issues raised in the consultation paper. We support clarifying the definition of unserved energy to wholesale-level outages, and to only including involuntary curtailment of demand, excluding voluntary curtailment such as demand response.
PIAC supports further exploring how out-of-market interventions should be treated, with a view to avoiding inflated estimates of unserved energy. We support reviewing the use of the contingency-based framework for unserved energy and recommend consumer interests be prioritised in any re-definition of unserved energy.
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