AEMC Inertia Ancillary Services Market rule change

PIAC lodged a submission to the AEMC’s consultation paper for the Inertia Ancillary Services Market rule change. With the transition currently underway in the National Electricity Market (NEM), the value of services to the system and consumers is changing. Monetising and rewarding some of these may be warranted. Inertia has decreased in level, and at the same time become more valuable, than when the NEM was formed. Nonetheless, PIAC considers that any rule change which impacts on consumer costs must be justified by demonstrably better outcomes for consumers through being based on their actual willingness to pay, rather than just “keeping the lights on” at any cost. PIAC recommended that the AEMC, in assessing methods to pay for providing inertia services, consider how efficiently, transparently and directly the costs may be passed on to the primary beneficiaries of enhanced inertia.