Five-Minute Settlement (5MS) Program

AEMO has established the 5MS Program in order to coordinate the implementation of changes as a result of the Five-Minute Settlement rule change, and the proposed Global Settlement rule change (if the AEMC make such a determination).

Five-Minute Settlement rule

On 28 November 2017, the AEMC made a final determination and rule to alter the settlement period for the wholesale electricity spot market from 30 minutes to five minutes, to align with the dispatch period. The commencement of the change is from 1 July 2021.

The AEMC determined that five-minute settlement would provide a better price signal for investment in fast response technologies, such as batteries, new gas peaking generation, and demand response. The alignment of the operational dispatch and financial settlement periods are expected to lead to more efficient bidding, operational decisions, and investment.

Information regarding the rule change, including the final determination and rule, is published on the AEMC website at: https://www.aemc.gov.au/rule-changes/five-minute-settlement

As part of consultation on the rule change, AEMO prepared a high-level design. This design outlines AEMO’s preliminary views on the procedure and systems impact of 5MS.

• AEMO report: Five-minute settlement high level design

Global Settlement rule

On 6 December 2018 the AEMC made a final rule that requires a move to a global settlement framework for the demand side of the wholesale electricity market.

The three key reasons why the AEMC has made a final rule to move to a global settlement framework are:

1. Improved transparency, leading to fewer settlement disputes and lower levels of Unaccounted for Energy (UFE) over time.
2. Competition on equal terms.
3. Improved risk allocation driving enhanced incentives.

Information regarding the rule change, including the final determination and rule, is published on the AEMC website at: https://www.aemc.gov.au/rule-changes/global-settlement-and-market-reconciliation

Information Sessions

AEMO intends to hold information sessions regularly throughout the program to help inform the broader industry on the changes and the activities that are being undertaken. Slides and notes from the sessions will be published below.

• Vendor Information Session - 03 December 2018 (928 KB, pptx)
• Participant Information Session - 30 November 2018 (939 KB, pptx)
• Information Session - 24 May 2018 (136 KB, docx)
• Slide pack - 24 May 2018 (467 KB, pptx)
• Session notes - 24 May 2018 (202 KB, docx)

Fact Sheets

AEMO will be preparing fact sheets on various aspects of the program, which will be published below as available.

• Five Minute Settlement Factsheet (195 KB, pdf)
• Five Minute Settlement Factsheet: What is Global Settlement? (188 KB, pdf)
• Five Minute Settlement Factsheet: One-on-One meetings (175 KB, pdf)

For further information

Please direct any queries regarding Five-Minute Settlement (5MS) to 5ms@aemo.com.au.