Supplementary Capacity

Invitation to Tender for Supplementary Capacity – WEM (now closed)

The Australian Energy Market Operator (AEMO) procures Reserve Capacity each year to ensure that there is sufficient generation capacity in the South West Interconnected System (SWIS) during peak demand periods.

Several changes and risks to supply have been identified since the publication of the 2022 WEM Electricity Statement of Opportunities in June 2022. This includes project delays, a voluntary capacity reduction for Alcoa Wagerup, an expected increase in AEMO’s peak demand forecasts and an increase in contingency reserve to account for decreasing reliability in the SWIS. As such, AEMO commenced the steps to procure up to 326 MW of anticipated shortfall of capacity between 1 December 2023 to 1 April 2024 in line with clause 4.24 of the WEM Rules.

AEMO sought tenders from providers capable of generation or load reduction which met the requirements of Eligible Services in line with clause 4.24.3 of the WEM Rules. This service is to be provided no earlier than 1 December 2023 and is to conclude by 1 April 2024.

Each Eligible Service must be available during the hours of 3:30 PM to 8:30 PM AWST in blocks of no less than 2 hours and must provide at least 1 MW of supplementary capacity. AEMO may procure this service from one or more providers, following evaluation of the submissions in line with AEMO’s internal procurement policy.

AEMO hosted an industry forum covering the requirements of the SRC process for the 2023-24 Capacity Year on 4 August 2023.

The Eligible Service must be available to be activated (if required) over a period of no longer than 16 weeks commencing on or after 1 December 2023 and ending on or before 1 April 2024.

The maximum contract value per hour of availability that will be accepted by AEMO for any Supplementary Capacity Contract is $ 1,661.12 per MW per hour. The Supplementary Capacity is expected to be required for no more than 48 hours throughout the period. 

Outcome

On 7 March 2024, AEMO concluded the formal tender and negotiation process for the 2023-24 SRC. The table below presents the related Supplementary Capacity Contract details in accordance with Clause 4.24.11B of the WEM Rules.

For assistance, please contact the Reserve Capacity (WA) team at wa.capacity@aemo.com.au.

Western Power enquiries must be directed to network.access@westernpower.com.au and cc wa.capacity@aemo.com.au.

Invitation to Tender for Supplementary Capacity – WEM

The Australian Energy Market Operator (AEMO) procures Reserve Capacity each year to ensure that there is sufficient generation capacity in the South West Interconnected System (SWIS) during peak demand periods.

Since the release of the 2022 WEM Electricity Statement of Opportunities, AEMO has identified a potential requirement to secure up to 174 MW between 1 December 2022 to 31 March 2023. The causes of this shortfall include the early retirement of the Kwinana Cogeneration Plant, an extended Forced Outage of Pinjar unit 10 until 30 April 2023, increase in AEMO’s peak demand forecasts, ongoing fuel supply limitations and project delays related to the 2022-23 Capacity Year. As such, AEMO is commencing the supplementary Reserve Capacity (SRC) process for the 2022-23 Capacity Year, in accordance with clause 4.24 of the Wholesale Electricity Market Rules.

AEMO is progressing the SRC process through an Invitation to Tender.

Invitation to Tender

AEMO is seeking tenders from providers capable of generation or load reduction which meet the requirements of Eligible Services in line with clause 4.24.3 of the WEM Rules. This service is to be provided no earlier than 1 December 2022 and is to conclude by 1 April 2023. Each Eligible Service must be available during the hours of 5:00 PM to 9:00 PM AWST in blocks of no less than 1 hour and must provide at least 1 MW of supplementary capacity. The maximum contract value per hour of availability is $2,380.23 per MW for any Supplementary Capacity Contract that AEMO will accept. A Maximum Availability Percentage (as defined in the WEM Procedure: Supplementary Reserve Capacity) of 7.4% applies. AEMO may procure this service from one or more providers, following evaluation of the submissions in line with AEMO’s internal procurement policy.

AEMO has published the Invitation to Tender on VendorPanel - https://www.vendorpanel.com.au/PublicTenders.aspx

It is requested that respondents complete and submit the Tender Form and Schedule 1 (both found in the Invitation to Tender) and the Vendor Pre-Qualification Questions as part of their submission.

Submissions must be made via the VendorPanel by 5:00 PM AWST by Friday, 21 October 2022.

Queries may be submitted via email to wa.capacity@aemo.com.au.

AEMO hosted an SRC industry forum on 3 October 2022 and presented details of the SRC tender process. The presentation is available below.