AEMO releases draft MLF report

AEMO has released its draft report forecasting Marginal LossFactors (MLFs) for the 2020 -21 financial year. This follows an indicative MLF report released in November 2019. The final MLFs for the 2020/21 financial year will be published on 1 April 2020.

MLFs relate to energy lost when flowing through powerlines due to electrical resistance and transmission line heating as transmission lines approach their thermal limits. Higher losses are seen in remote parts of the network and in areas where there is congestion on the transmission network.

Loss factors are calculated and fixed annually for each individual generator to facilitate efficient scheduling and settlement processes in the National Electricity Market (NEM).

The draft report shows that as more generation is connected to electrically weak areas of the network, particularly when they are remote from the major demand centres, the MLFs in these areas will continue to decline.

Changes between the 2019-20 MLFs and the 2020-21 MLFs on an average basis for each region are summarised below:

Tasmania	No notable change
Victoria	North Western Victoria MLFs are lower, largely driven by projected ramp up in large scale solar projects and the impact of increasing diurnal profile of both loads and generation Northern Victoria MLFs are higher, driven by projected increased exports to New South Wales Western Victoria and Central Victorian MLFs are lower, driven by projected increased generation within these areas
South Australia	South East South Australia and Riverland MLFs are lower, driven by projected decrease in exports to Victoria
New South Wales	Northern New South Wales MLFs are higher, driven by projected reduction in imports from Queensland Snowy, ACT and Western New South Wales MLFs are lower, driven by projected increase in imports from Victoria South West New South Wales MLFs are lower, driven by projected increase in imports from Victoria and an increase in transfer limits
Queensland	North Queensland MLFs are lower, driven by both projected reduction in load and increase in generation within the area Central Queensland MLFs are higher, driven by both projected increase in load and reduction in generation within the area South West Queensland MLFs are lower, driven by projected decrease in exports to New South Wales

This report comes after the Australian Energy Market Commission (AEMC) handed down a final determination on the 27^th of February against the implementation of the proposed ‘average loss factor’ calculation method.

AEMO is committed to providing the market with greater transparency about likely future changes to MLFs driven by new generation seeking to connect to the grid. This includes publishing MLF updates more frequently to assist in identifying changes and trends, as well as working with industry and the AEMC on potential options to reduce the impact of significant year-on-year changes.

“We recognise loss factors are a challenging issue for the industry. More accurate information, higher quality data and expediting progress on necessary transmission upgrades should all support a better solution for both industry and consumers,” AEMO CEO and Managing Director, Audrey Zibelman said.

AEMO is currently working with stakeholders to refine these draft MLFs prior to the release of the final MLFs for FY 2020-21 on 1 April 2020.

Following the release of the final MLFs, AEMO will be commencing a review of the MLF methodology. AEMO welcomes comment and feedback on the draft MLFs and the current process, including transparency improvements. Feedback can be provided to mlf_feedback@aemo.com.au.

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AEMO releases draft MLF report

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