Certification of reserve capacity
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
Market participants wishing to apply for capacity credits must first receive certification for that capacity. This requires a technical review of the capability of the facility, and determines the maximum quantity of capacity credits that can be allocated to each facility.
Certified reserve capacity is assigned according to facility type as follows:
- Scheduled generators – sent-out capacity calculated at air temperature of 41 degrees Celsius. This accounts for an efficiency loss at high temperatures, which are typical during peak demand periods.
- Intermittent generators – considers the performance of the facility during peak demand trading intervals.
- Demand side programs – the amount by which the demand from the load or aggregated loads can be curtailed.
AEMO may take the following into account when determining certified reserve capacity for a facility, particularly for new facilities:
- Nameplate capacity and temperature de-rate curve.
- Transmission network access arrangements.
- Environmental approvals.
- Contracts for fuel supplies.
- Expected hours of availability.
- Details of financing arrangements.
- Demand side management (DSM) contracts and load reduction capability.
- Key project dates.
The approval of certified reserve capacity does not automatically entitle a market participant to receive capacity credits or associated payments. Capacity credits are assigned once participants have completed bilateral trade declarations and the reserve capacity auction has been run (if one is required).
Certification is usually completed during July and August each year.
Certified reserve capacity by capacity year
The documents below contain the amount of Certified Reserve Capacity by facility for the 2013–14 and on Capacity Years. Earlier years are not published, as clause 10.5.1(f)(iiiA), which requires publication of these documents, only came into effect from 8 July 2011.
For all extension notices, please visit the Reserve capacity timetable page.
Notice: Network access requirements for Certification - 2016 and 2017 Reserve Capacity Cycles
Documented evidence of entitlement to network access under clause 4.10.1(bA) of Wholesale Electricity Market Rules
AEMO has received enquiries about the 2016 and 2017 Certified Reserve Capacity application process, specifically, the requirement for documented evidence of an entitlement to network access under clause 4.10.1(bA) of the Wholesale Electricity Market Rules (WEM Rules).
AEMO advises that, for a Certified Reserve Capacity application to be valid, it must comply with the requirements of clauses 4.9.3(a) and 4.10.1 of the WEM Rules. That is, it must include documentation that provides evidence of the matters specified in clause 4.10.1 of the WEM Rules. The application and the documented evidence must be provided to AEMO by 5:00 pm on 30 June 2017, the closing date for 2016 and 2017 Certified Reserve Capacity applications.
Clause 4.10.1(bA) of the WEM Rules requires the Market Participant to submit documented evidence of (among other things) an entitlement to network access from a specified date. The specified date must be prior to the date when the Facility will be subject to Reserve Capacity Obligations. In general terms, AEMO notes that documented evidence of an entitlement to network access from a specified date is typically a signed Electricity Transfer Access Contract (ETAC). Further, for a new Facility, an entitlement to the network service(s) under the ETAC from a specified date is likely to be subject to the new Facility being connected to the network. That is, the entitlement to network access does not arise until the new Facility has been connected to the network. Therefore, in those cases, AEMO will also require documented evidence of an entitlement for the new Facility to be connected to the network from a specified date. The documented evidence of an entitlement for the new Facility to be connected to the network from a specified date can typically be a signed Interconnection Works Contract or connection contract.
If there are any conditions (e.g. conditions precedent) to the entitlement to access, then, depending on the nature of those conditions, the documented evidence is unlikely to support an entitlement to network access from a specified date. AEMO will assess these matters on a case-by-case basis, if they arise.
AEMO notes that the requirements of clause 4.10.1(bA) of the WEM Rules in relation to the details of any constraints are currently being reviewed. However, it is not anticipated that the review process will result in changes to the requirement for documented evidence of an entitlement to network access from a specified date.
In summary, if an application does not include documented evidence of an entitlement to network access from a specified date, then the application is not valid and AEMO cannot assess it.
AEMO's position is supported by the advanced findings provided to AEMO by its market auditor regarding AEMO's assessment of 2015 Certified Reserve Capacity applications. The market auditor found that AEMO breached the WEM Rules by assigning Certified Reserve Capacity to a Facility for which there was no signed ETAC.
The assignment of Certified Reserve Capacity for the 2015 Reserve Capacity Cycle occurred outside of the 2016 audit period, and therefore the market auditor’s findings are not included in that report. However, a copy of the market auditor's advanced finding, redacted for confidentiality purposes, can be found here.
2016 and 2017 Reserve Capacity certification workshop
AEMO held a stakeholder workshop on 19 April 2017 to provide information about the Certification of Reserve Capacity (CRC) for the 2016 and 2017 Reserve Capacity Cycles. The presentation is available below.Previous Reserve Capacity workshops
Certification of Reserve Capacity guideline
The first of four tranches of amendments to the Wholesale Electricity Market Rules (with respect to the Reserve Capacity Mechanism) commenced on 1 June 2016. Corresponding changes to the Certification of Reserve Capacity Market Procedure are required. AEMO is developing a Procedure Change Proposal (as required by clause 2.10 of the Market Rules) and will publish it on the Market Website as soon as it is finalised. Market Participants and other interested stakeholders will have the opportunity to make submissions on the Procedure Change Proposal.
In the meantime, to assist Market Participants, AEMO has published a guideline document (based on the Market Rules as amended) to explain how the new processes for Certified Reserve Capacity applications will be applied in practice.
Information related to specific cases of certification of reserve capacity
The following sections contain information relating to specific cases of certification of reserve capacity.Relevant Level Methodology
Facilities nominating to use clause 4.11.2(b) of the WEM Rules for their Certified Reserve Capacity (CRC) applications will be subject to the Relevant Level Methodology outlined in Appendix 9 of the WEM Rules.
The Relevant Level calculation is based on the Existing Load for Scheduled Generation (EFLSG), defined in Appendix 9 of the WEM Rules and explained in more detail in the help guide below.
Existing facility load for scheduled generation
The approval of Rule Change RC_2017_03 requires AEMO to publish a forecast of the EFLSG Trading Intervals by 1 June of Year 1 of the relevant Reserve Capacity Cycle. These are provided in the files below.
The final EFSLG intervals will be published three business days after the date specified in clause 4.1.11 of the WEM Rules (as modified or extended) for the 2016 and 2017 Reserve Capacity Cycles.
Note: Due to metering data updates and changes to the set of candidate Facilities that have applied for CRC, the final EFLSG Trading Intervals will vary from the forecast EFLSG Trading Intervals.
The Facility adjustment factor calculation in step 17 of Appendix 9 uses two parameters, K and U. The values of K and U for the 2015, 2016 and 2017 Reserve Capacity Cycles determined by the IMO on 12 December 2014 are available here. Future K and U values will be determined by the Economic Regulation Authority in accordance with clause 4.11.3C of the WEM Rules.
New and upgrade Facilities – Accredited independent expert report
In accordance with clause 4.10.3 of the WEM Rules, if a Facility nominates clause 4.11.2(b) of the WEM Rules in its CRC application and belongs to one of the following categories:
Has not yet entered service.
Re-entering service after significant maintenance.
Re-entering service after having been upgraded.
Has not operated with the configuration outlined in its CRC application for the entire identified period (step 1(a) of the Relevant Level Methodology).
This Facility must include in their CRC application, a report prepared by an accredited independent expert (clause 4.11.6 of the WEM Rules). In accordance with clause 4.10.3A of the WEM Rules, the independent expert report must include:
A reasonable estimate of the Facility’s expected energy output (in MWh) for each Trading Interval over the period identified in step 1(a) of the Relevant Level Methodology.
Please provide expected energy output estimates using this template:
A 5% probability of exceedance of the Facility’s expected generation output value (in MW) for all the Trading Intervals that occurred within the last three years up to, and including, the last Hot Season.
The table below shows the experts AEMO has accredited to provide these reports.
DNV GL Australia
Christian Peake, Senior Engineer
(03) 9600 1993
(03) 9602 1714
Jacobs Group (Australia) Pty Ltd
Paul Nidras, Senior Consultant
(03) 8668 3326
(03) 8668 3001
WSP Australia Pty Limited
Heidi Sick, Section Executive
(03) 9861 1184
SpringCity Pty Ltd (restricted to solar generator assessments only)
Emran Malhi, Managing Partner
(08) 9278 2456
(08) 9278 2424Conditional certified reserve capacity
Project proponents may apply to AEMO for Conditional Certified Reserve Capacity at any time before the usual annual certification process. This conditional certification process seeks to give investors greater certainty in securing financing and negotiating bilateral contracts. The information required with an application for Conditional Certified Reserve Capacity is the same as for normal certification.
A project proponent holding Conditional Certified Reserve Capacity for a future Reserve Capacity Cycle must re-apply for Certified Reserve Capacity during the normal certification window. When the Market Participant applies for final certification, it will automatically be granted, provided no information has changed since the conditional certification. Applications for conditional certification attract a processing fee.Early certified reserve capacity
The Early Certified Reserve Capacity process allows new generation projects with long lead times to secure Capacity Credits earlier, providing greater certainty for investors. Early Certified Reserve Capacity, and associated Capacity Credits assigned, are granted for the applicable Capacity Year. The Market Participant does not need to re-apply for certification during the normal window.
Applications for Early Certified Reserve Capacity may be made at any time before the start of Year 1 of the relevant Reserve Capacity Cycle. To be eligible for Early Certified Reserve Capacity, the facility must be deemed 'Committed' and the proponent must declare its intention to bilaterally trade all assigned Capacity Credits. The proponent must then provide Reserve Capacity Security within 30 days of approval of Early Certified Reserve Capacity.New small generators
The standard Reserve Capacity processes allow two years between the assignment of Capacity Credits and the start of obligations associated with those Capacity Credits. This allows time for new generation capacity to be installed. However, small generators can often be installed more quickly.
Generators not exceeding 1 MW can secure Capacity Credits on a shorter timeline. An operator of such a generator may apply to AEMO for Capacity Credits to be assigned for the beginning on the next Capacity Year. It may then reapply for Capacity Credits each year until the start of the first Capacity Year for which it could have secured Capacity Credits under the normal process.
Further details on this process can be found in the Market Procedure: Treatment of New Small Generators.