National Electricity Amendment (Generator ramp rule and dispatch inflexibility in bidding) Rule 2014

This submission responded to the Australian Energy Market Commission’s (AEMC) draft rule determination, National Electricity Amendment (Generator ramp rates and dispatch inflexibility in bidding) Rule 2014 (the Draft Determination). The Draft Determination responded to a proposal from the Australian Energy Regulator (AER) to change the rules governing the rate of change in electricity generation submitted by generators to the Australian Energy Market Operator (known as their ‘ramp rate’). The Draft Determination does not fully adopt the AER proposal but does increase the minimum ramp rate to 1% of total generator capacity. In its submission, PIAC raised concerns about how a generator’s total capacity would be determined, and whether this would be subject to change due to wear and tear on generator assets. PIAC also proposed an alternative approach to determining the minimum ramp rate: basing the figure on observations of generator behaviour when quickly increasing or decreasing production is their interest. The submission proposed that while such an approach would be complex, it would mean generators were less likely to ‘game’ the rules governing dispatch of production, leading to lower prices for consumers.