Certification of Reserve Capacity

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. For further information please refer to the Market Procedure: Certification of Reserve Capacity here.

Certified Reserve Capacity by Capacity Year

The documents below contain the amount of Certified Reserve Capacity by Facility for the 2013–14 and future 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.

 

Constrained Access Certification review - 2019 update

AEMO must carry out a review of Appendix 11, the Constrained Access Entitlement methodology under clause 4.1.34 of the WEM Rules. The review was deferred last year (see below notice), due to uncertainty around the Constrained Access arrangement. In accordance with clause 4.1.32, AEMO has further extended the date by which it must complete the Constrained Access Certification Review until 1 January 2021, given the constrained access design arrangements are currently being developed as part of the Energy Transformation Strategy.

Constrained Access Certification review (2018)

In accordance with clause 4.1.32 of the Wholesale Electricity Market (WEM) Rules AEMO has extended the date by which it must complete a Constrained Access Certification Review. The review required under clause 4.1.34 of the WEM Rules must include:

  • an assessment of Appendix 11 of the WEM Rules including the concepts of Constrained Access Facility and Constrained Access Entitlement; and
  • consider whether any changes to the WEM Rules are required.

AEMO has extended the deadline to complete the Constrained Access Certification Review due to the Public Utilities Office Wholesale Electricity reform work program which is currently implementing market arrangements that will introduce Security Constrained Market and Dispatch. Rule changes that will be implemented under the reform work are likely to impact how AEMO assigns Certified Reserve Capacity to all Facilities under the new constrained access model, and potentially negate any changes that may result from a Constrained Access Certification Review.

AEMO has extended the date by which it must complete the Constrained Access Certification Review until 1 January 2020.

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.

2019 Reserve Capacity certification workshop

AEMO held a stakeholder workshop on 31 May 2019 to provide information about the Certification of Reserve Capacity (CRC) for the 2019 Reserve Capacity Cycle. The presentation is available below.

Previous Reserve Capacity workshops

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 (EFLSG)

In accordance with Step 20 of Appendix 9 of the WEM Rules, the EFLSG Trading Intervals for the 2019 Reserve Capacity Cycle have been determined and are available in the file below:

AEMO is required to publish a forecast of the EFLSG Trading Intervals by 1 June of Year 1 of the relevant Reserve Capacity Cycle. The forecast EFLSG Trading Intervals for the 2019 Reserve Capacity Cycle are provided in the file below:

The EFLSG Trading Intervals for the previous Reserve Capacity Cycles are provided in the files below:

The forecast EFLSG Trading Intervals for previous Reserve Capacity Cycles are provided in the files below:

Note: Due to metering data updates and changes to the set of candidate Facilities that have applied for CRC, the EFLSG Trading Intervals published and used for the Relevant Level calculation may 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 2019, 2020 and 2021 Reserve Capacity Cycles have been determined by the ERA and are available here

New and upgrade Facilities – Accredited independent expert report

AEMO has developed an independent expert report guideline to assist accredited experts in their understanding of the report requirements and the purpose it serves in the RCM. AEMO held a workshop with accredited experts on 22 January 2019 and incorporated the feedback provided in the guideline below.

Information guide for independent expert reports in the Reserve Capacity Mechanism (419 KB, PDF)

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.

Organisation

Contact

Phone

Email

DNV GL Australia           

Christian Peake, Head of Section, Energy and Development Services

(03) 8615 1515 

christian.peake@dnvgl.com

Jacobs             

Anna Saunders, Senior Renewables Engineer

 (03) 8668 3138

anna.saunders@jacobs.com 

WSP

Heather Hurree, Technical Manager- Wind Engineering

(03) 9861 1244

heather.hurree@wsp.com

SpringCity  

Emran Malhi, Managing Director

(08) 9278 2456

emranmalhi@springcity.com.au

Conditional 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.

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