Have you appointed your Metering Coordinator?

The implementation of the new arrangements resulting from the Power of Choice Review undertaken by the Australian Energy Market Commission’s (AEMC), will take effect on 1 December 2017.  The new arrangements include the introduction of the Metering Coordinator, along with changes to the National Electricity Rules (NER).The implementation of the new arrangements resulting from the Power of Choice Review undertaken by the Australian Energy Market Commission’s (AEMC), will take effect on 1 December 2017.  The new arrangements include the introduction of the Metering Coordinator, along with changes to the National Electricity Rules (NER).

Key features of the final rule include:

1. A shift in who has overall responsibility for metering services under the NER, promoting competition in the provision of metering and related services. This is a result of the following:

  • the role and responsibilities of the existing “Responsible Person” to be provided by a new type of Registered Participant, referred to as a Metering Coordinator;
  • allowing any person to become a Metering Coordinator, subject to meeting the registration requirements, other than at transmission connection points and in relation to type 7 metering installations;
  • permitting large customers, and Non-Market and exempt Generators to appoint their own Metering Coordinator at distribution connection points; and requiring a retailer to appoint the Metering Coordinator, where a customer hasn’t appointed its own Metering Coordinator

 
2. The Metering Coordinator will take on roles additional to those currently performed by the Responsible Person, ensuring that the security of, and access to, advanced meters and the services they provide are appropriately managed.

3. Local Network Service Providers (LNSPs) will continue to benefit from network devices installed at customers’ premises, allowing them to monitor, operate or control their networks, provided there is sufficient space to house both the metering installation and the network device.

4. It permits a retailer to arrange for a supply interruption at its customers’ premises for the purposes of installing, maintaining, repairing or replacing an electricity meter.

5. Retailers have the ability to arrange for the de-energisation of a premises if the customer fails to give safe and unhindered access to the premises.

What this means for you:

As a large customer you will have the ability to engage your preferred Metering Coordinator as of 1st December 2017.  If you currently have a Direct Metering Agreement (DMA) with a provider, your retailer should be instructed to nominate your metering provider as Metering Coordinator.

Should you not have a DMA in place, now would be an opportune time to discuss your metering requirements with Edge, as we are in a position to negotiate competitive rates for your metering services.

The reforms from the Power of Choice Review will support the electricity market in meeting consumer needs over the next 15-20 years.  It provides more opportunities for consumers to make informed choices about the way they use electricity based on the benefits that end use services provide. Further information on Power of Choice can be found here: http://www.aemc.gov.au/Major-Pages/Power-of-choice

Potential delay in reaching agreement on National Energy Guarantee

The Queensland Premier officially called an early election to be held 25 November 2017. This means that the planned November COAG Energy Council meeting is unlikely to be able to agree on the National Energy Guarantee (NEG) as it requires all states and territories in the National Electricity Market to agree. The Federal Minister for the Environment and Energy, Josh Frydenberg, is still pushing ahead with modelling the scheme which the Energy Security Board will deliver to the Minister 13 November 2017.

It is not known how soon after the election a government could be formed in Queensland, however with Sportsbet tipping the Liberals to take over in a close race, it may take some time. Until then, the only constant is uncertainty which is proving highly detrimental to investment.

Ergon Retail offer ‘EasyPay Rewards’ to help alleviate rising costs in energy

On Tuesday 24 October, Queensland Treasurer Curtis Pitt and Energy Minister Mark Baily announced a new suite of measures to create electricity savings for Queenslanders under the Palaszczuk Government’s Affordable Energy Plan.

One of the initiatives announced will be the removal of Ergon’s non-reversion policy.  The non-reversion policy prevented customers who transferred away from Ergon Retail from returning.  The Government believes that removing this policy will give customers in regional Queensland more choice when selecting a retailer.  Not only will regional customers be able to shop around, but they will now have the ability to test the water and return to Ergon Retail should they wish to do so.  Coupled with this announcement, Ergon Retail are now offering ‘EasyPay Rewards’ whereby regional customers could earn discounts of up to $75 for residential households and $120 for small businesses every year.

Other initiatives under the Affordable Energy Plan included:

  • Rebates of up to $300 to purchase an energy efficient fridge, washing machines or air conditioner, providing bill savings of up to $50 a year for an energy efficient washing machine or fridge or $135 a year for an air conditioner. Up to 100,000 Queensland households are expected to take up the offer.
  • An Asset Ownership Dividend of $50 a year for every household bill over the next two years, starting from January 2018 and evident on bills from the second quarter of 2018.
  • Another 4000 regional households can save up to $200 through the expansion of the Energy Savvy program.
  • Support for primary producers by delivering an additional 200 energy audits to agricultural customers through an expanded Energy Savers Plus program in partnership with the Queensland Farmers’ Federation, as well as providing a 50% co-contribution (up to $20,000) to implement audit recommendations.
  • Support for Queensland jobs and industry by providing energy audits for large customers including manufacturers, with a 50% co-contribution to implement recommendations (up to $250,000 per customer). This is expected to deliver savings of 10% to 40% for large industrial customers.
  • No-interest loans to help those Queenslanders who don’t have access to the upfront capital required to invest in solar and battery technologies to help reduce their bills and be part of a clean energy future. Queenslanders will be able to apply from March 2018, with savings of up to $700 per year expected for those who take up solar.

 

The initiatives are planned to be available from 1 January 2018, with calls for applications for Ergon’s EasyPay Rewards open now.

QLD Premier provides ultimatum to QLD Retailers

QLD energy retailers have been requested by the QLD Premier to pass on lower electricity prices to customers or face public shaming and increased competition through a new government owned retailer.

The lower electricity prices are driven by the QLD Governments intervention in the market which consists of ordering Stanwell Corporation (state owned) to lower wholesale prices, the $770 million subsidy for non-solar households for QLD Solar Bonus Scheme and the recommissioning of the Swanbank E Gas power station. Premier Palaszczuk promised to name and shame retailers who did not commit to the pledge by this Friday. Moving forward, Ms Palaszczuk confirmed that her government and the QLD Competition Authority would be monitoring retailers on a quarterly basis. If it is found that retailers are not passing on the savings then she would order a re-entry by the government into the retailing sector.

Clean Energy Target dismissed by Federal Government

The Federal Government has released its Powering Forward Plan which seeks to reduce electricity prices while still delivering reliable energy and meeting Australia’s international commitments on carbon reduction. The plan is wide ranging and includes direct subsidies to vulnerable households as well as improved transparency in the gas market.

The Plan will look at putting obligations on the retailers to secure a minimum amount of synchronous generation. It was also confirmed that the Government would not be implementing the Clean Energy Target proposed by Finkel, however will obligate retailers to purchase an amount of low-emissions generation. The targets have not been set at this stage.

It was also reported that renewable generators which were built after 2020 would not be eligible to receive large-scale generation certificates. Any renewable generation built before 2020 would still be eligible (subject to current eligibility criteria) to create certificates out to 2030.

The market responded with increased prices. Until there is further clarity, the market will remain nervous.

If you would like to know more about this announcement and how your business may be affected, please call one of our team members on 07 3232 1115 or contact your Edge Portfolio Manager.

Energy Minister Josh Freydenburg commits to a response on the Clean Energy Target before the end of the year

The Australian Financial Review National Energy Summit kicked off in Sydney this morning.

Within the first hour of the summit beginning, Federal Environment and Energy Minister Josh Freydenburg has committed to respond to the Clean Energy Target (CET) recommended in the Finkel Review. This is the only outstanding recommendation from the Finkel review that has not been accepted by the Turnbull Government.

Edge are at the AFR’s energy summit and will continue to provide updates over the next two days.

Gas production gap grows wider

The Australian Energy Market Operator (AEMO) recently published an update to the Gas Statement of Opportunities. The sticking point of the publication is a forecasted 54 petajoule and 48 petajoule (PJ) shortfall in 2018 and 2019 respectively. The forecast shortfall is three times higher than the forecast earlier this year. The report estimates aggregate gas production in 2018 to be 1,891 PJs and a shortfall of 54 PJs, or as a percentage, 3% of total production. This is a very small margin and given the level of assumption contained in the report Edge believe it should be considered cautiously.

Putting aside the potential inaccuracies of the report, it is important to consider the wider implications of federal government intervening into the gas market and how this will be perceived by international investors. Australia is the second largest gas exporting country in the world, has close proximity to Asia and AAA credit rating. Political intervention into markets is viewed as a sovereign risk and may be the difference between investment here or abroad. The longer term outcome of less capital coming into the Australian gas market is that prices will eventually rise.

Malcolm Roberts the Chief Executive of the Australian Petroleum Production & Exploration Association said “Looking ahead to 2018, there is a large supply of uncontracted gas available for domestic customers. The industry has made it clear that it will ensure that sufficient gas is available for the domestic market”. These comments are in complete contrast to the AEMO update and suggest that there will not be shortfall of gas.

There are a broad range of stakeholders who will be impacted by the actions of the federal government whether that is intervening or not. The federal government has until 1 November to decide whether the Australian Domestic Gas Mechanism will be put in place. If it is actioned the mechanism will begin on 1 January 2018.

Edge will continue to monitor the actions of gas producers and the federal government in the coming weeks.

The AFR reports that the Federal Government is moving away from a CET

According to an article published by the Australian Financial Review earlier today, the Federal Government has given notice that it is moving away from a Clean Energy Target (CET). If the government chooses to move away from a CET, the market will continue to suffer from increased policy uncertainty. Policy uncertainty is having detrimental impacts on the development of new energy generating resources, particularly when securing capital. Without access to affordable capital new energy resources are less likely to be constructed and consumers are likely to incur further increases in energy prices.

In a timely release from the Australian Energy Market Commission (AEMC), today released a discussion paper on the strategic priorities for the Australian energy market. In this paper the AEMC outlines priority actions for governments and energy market bodies to support the delivery of secure and reliable electricity and gas to households and businesses at the lowest possible cost, while also meeting emissions reduction commitments. One of the key areas covered in the goals is “The integrations of energy and emissions policy, underpinned by a long-term national emissions reduction target”. The identification of emissions reductions policy by the AEMC further enforces how important long term policy commitment from the Federal Government is for the secure and reliable delivery of energy.

The Federal Government is yet to formally announce when it is planning on committing to an emissions reduction policy. Recent comments suggest that a commitment will not be made in the near future.

AEMO Request for Long Notice RERT – Second Round

On 13 July 2017, the Australian Energy Market Operator (AEMO) issued an Invitation to Tender to seek responses from potential providers for the Long Notice Reliability and Emergency Reserve Trader (RERT) contracts (“First Round ITT”). On 6 September, AEMO followed up the First Round ITT with a Second Round Request for Long Notice RERT after additional forecast reserve requirements for the period January to March 2018.

In accordance with the National Electricity Rules and the RERT Guidelines, AEMO is now issuing a second round invitation to Tender for Long Notice RERT (Second Round ITT) seeking offers for the provision of long notice reserve for January 2018 to March 2018 in Victoria and South Australia (combined requirement). These second round offers will be in addition to the reserve tenders received in the First Round ITT conducted earlier this year (refer to Edge News, AEMO Considers Options For Better Load Management in VIC and SA).

For long notice RERT, AEMO must enter into contracts prior to 31 October 2017. Consequently, the Second Round ITT announced there is likely to be a final opportunity for providers to tender for provisions of Long Notice RERT reserve.

AEMO (Audrey Zibelman CEO of AEMO) commented in the media yesterday, saying “I feel very comfortable we have done everything we can, and maybe then some; to make sure we are able to get through this summer without any load-shedding and that’s very important”. The comment suggests the commitment to participate in the RERT has been to the extent that there will be no involuntary load shedding, despite AEMO publishing in the Electricity Statement of Opportunity, released on 5 September, that described the VIC and SA markets as being “in a tight supply-demand balance” and could face involuntary load shedding.

If you would like to read more about what the outlook means for your business contact Edge on 07 3232 1115.

AEMO fears insufficient generation will cause load shedding

The Australian Energy Market Operator (AEMO) published their annual Electricity Statement of Opportunity (ESOO) on 5 September 2017. The report highlights that both Victoria and South Australia could face involuntary load shedding during the 2017-18 summer.

AEMO points to ‘radically changing dynamics of the power system’ which has resulted ‘in a tight supply-demand balance’. It also points out that the responsiveness and resilience of the system is under threat from plant closures and extreme weather event.

AEMO is concerned that both Victoria and South Australia could face enough involuntary load shedding that the reliability standard cannot be met. This means that AEMO is unable to dispatch the market to keep unserved energy under 0.002% for the financial year. The report also shows an increasing amount of potential load shedding for New South Wales starting in 2022-23 when Liddell Power Station is expected to retire.

Figure 1 Range of Unserved Energy Outcomes

Source: AEMO

If you would like to read more about what the outlook means for your business go to AEMO’s website.

If you would like to discuss the findings of the report, contact Edge on 07 3232 1115.