The Australian Energy Market Operator (AEMO) today released its final report determining Marginal Loss Factors (MLFs) for the 2021-22 financial year.
Losses of electricity occur in transmission, as an inevitable part of getting energy to customers. Taking these losses into account, AEMO publishes its MLF data as a market signal to ensure the transport of electricity is considered in delivering the best outcome for customers.
The report builds on early insights into expected MLF changes across the National Electricity Market (NEM), in the preliminary report released in December 2020 and the draft report released in March 2021.
These reports reflect the rapidly changing supply and demand patterns in the NEM, driven by new technology and a changing generation mix. This has led to large year-on-year changes in MLFs, particularly in areas of high renewable penetration that are electrically weak and remote from load centres.
The changes in MLFs highlights the ongoing need for comprehensive planning of both generation and electricity transmission to minimise costs to consumers. All-of-system planning documents, such as AEMO’s Integrated System Plan (ISP), are critical in the provision of information to participants regarding the needs of, and changes to, the power system.
Changes between the 2020-21 MLFs and the 2021-22 MLFs are mainly due to changes in projected power flow over the transmission network. The key drivers for these changes are:
Projected growth in renewable generation output across the NEM, which is expected to displace thermal generation, particularly in NSW. Coupled with lower projected demand in Victoria and South Australia resulting in a projected increase in import to NSW, MLFs across much of NSW (particularly southern NSW) have decreased.
Network limits in south-west NSW, north-west Victoria (collectively referred to as the West Murray Zone) and northern Queensland continue to offset the increased output from renewables, moderating impact on renewables in these areas.
West Murray network limits will also continue to impact flows on Murraylink, resulting in circular flows between SA and Victoria during the day (i.e. Murraylink flowing west at the same time as Heywood flowing east). This will decrease MLFs for South Australian Riverland loads.
AEMO remains committed to providing the market with as much transparency as possible about where new generation is expected to connect to the grid, and publishing MLF updates to assist in identifying changes and trends.
The latest MLF report reflects the revised methodology following a review conducted in 2020, and has undergone stringent quality control including the engagement of an experienced external consultancy to review the inputs and results.
Media enquiries may be directed to AEMO Media on 0409 382 121 I Email: firstname.lastname@example.org