Benchmark reserve capacity price
In this section
In this section
- Reserve capacity timetable
- Benchmark reserve capacity price
- Expressions of interest
- Certification of reserve capacity
- Reserve capacity security
- Reserve capacity auction
- Assignment of capacity credits
- Facility tests
- Supplementary reserve capacity
- Individual reserve capacity requirement (IRCR) information
The benchmark reserve capacity price (BRCP) sets the maximum price that may be offered in a reserve capacity auction, and is also used to set an administered reserve capacity price if no auction is required. Each year, AEMO is required to determine the BRCP in accordance with the Market Procedure: Maximum Reserve Capacity Price.
The BRCP aims to establish the marginal cost of providing additional reserve capacity in each capacity year. The BRCP is calculated by undertaking a technical, bottom-up cost evaluation of the entry of a 160 MW open-cycle gas turbine generation facility in the WEM in the relevant capacity year.
The steps AEMO follows to complete the annual review of the BRCP are:
- Calculate the draft value of the BRCP and publish the results in a draft report.
- Request public submissions on the draft report.
- Assess public submissions and adjust the BRCP if appropriate.
- Submit the final value of the BRCP in a final report to the Economic Regulation Authority (ERA) for approval.
- Publish the final report once it has been approved by the ERA.
The final BRCP calculated for the 2016 Reserve Capacity Cycle is $159,800 per MW per year for the capacity year from 1 October 2018 to 1 October 2019.
For more information on the 2016 BRCP and draft 2017 BRCP, please see the below.
Historical benchmark reserve capacity prices
The BRCP was set at $150,000 per MW per year for the first reserve capacity cycle, applying from market start to 1 October 2008. The figure below shows the breakdown of the cost components of the BRCP for the 2008–09 to 2018–19 capacity cycles.
The table below shows the BRCP and reserve capacity price for each capacity year since market start. The reserve capacity price is paid by AEMO for capacity credits not bilaterally traded between market participants.
Capacity Year BRCP ($ per MW per year) Reserve Capacity Price ($ per MW per year) 2018–19 $159,800 2017–18 $164,800 2016–17 $176,800 $121,888.94 2015–16 $157,000 $120,199.31 2014–15 $163,900 $122,427.87 2013–14 $240,600 $178,476.69 2012–13 $238,500 $186,001.04 2011–12 $164,100 $131,804.58 2010–11 $173,400 $144,235.38 2009–10 $142,200 $108,458.57 2008–09 $122,500 $97,834.89 2007–08 $150,000 $127,500.00 2006–07 $150,000 $127,500.00 2005–06 $150,000 $127,500.00
2017 Benchmark Reserve Capacity Price
AEMO has completed its draft determination of the 2017 Benchmark Reserve Capacity Price (BRCP). The BRCP for the 2017 Reserve Capacity Cycle will be effective for the 2019-20 Capacity Year, which starts on 1 October 2019 and ends on 1 October 2020.
AEMO proposed a draft value of $145,800 per MW per year for the 2017 BRCP.
The draft report and all submissions received can be found here. AEMO will consider all feedback prior to submitting the final report to the Economic Regulation Authority (ERA) for approval.
2016 benchmark reserve capacity price
For the 2018–19 capacity year, AEMO proposed a final revised value for the benchmark reserve capacity price of $159,800 per MW per year to the Economic Regulation Authority (ERA).
This value was approved by the ERA on 8 March 2016 in accordance with clause 2.26 of the Market Rules. The benchmark reserve capacity price of $159,800 per MW per year will be effective from 1 October 2018 to 1 October 2019.RELATED DOCUMENTS
Submissions received during public consultation period
Synergy [473 kB]
Tesla Corporation [1.8 MB]
Previous Benchmark Reserve Capacity Prices (before 2016)
BRCP determinations made before 2015 can be found here.
Five-yearly methodology reviewRELATED INFORMATION
The Economic Regulation Authority is required to review the Market Procedure: Maximum Reserve Capacity Price at least once every five years (clause 4.16.9 of the Market Rules). This review was last completed in 2011 by the Maximum Reserve Capacity Price Working Group.
As a result of the last review, the IMO developed a Procedure Change Proposal to amend the Market Procedure. The amended Market Procedure commenced in October 2011. The Procedure Change Proposal and related documents can be found here.