Government move on power plant closures

The Federal Government is seeking changes to make energy companies give a longer period of notice before shutting down power plants. Energy Minister Angus Taylor has written to the Australian Energy Market Commission (AEMC) to ask for a change to the National Electricity Rules to extend the notice period from 3.5 years to a minimum of five years. “If accepted, the rule change will increase notice of closure requirements to 5 years to allow adequate lead time for new capacity to be built to replace exiting generation, and to prevent potential gaming of notice of closure requirements by market participants," he said. “This is a sensible change, and necessary to ensure the National Electricity Market (NEM) remains reliable and secure. “Without this rule change, there is a risk that retiring capacity is not replaced in time or is only able to be replaced with inadequate or inefficient options that are available in short timeframes, risking the reliability, affordability and security of the system." But Australian Energy Council chief executive Sarah McNamara said long firm-notice requirements had complex and potentially counterproductive impacts. "For example, they may force a generator to publish a firm date long before the operational circumstances of the plant are clear," she said. "As conditions change, inevitable adjustments will occur, that in turn can lead to a loss of confidence in the information.“ The change the government proposes also includes a new definition of ‘longer term mothballing’, within notice of closure arrangements. A longer term mothballed plant will be defined as a generator that will be unable able to dispatch for 9 months or longer over a 12 month period. These generators would be subject to the same notice period that applies to permanent closures, to avoid potential gaming where generators could mothball a plant indefinitely without providing any notice or date of an intended closure. Seasonal mothballing, defined as a generator not being available to dispatch electricity into the NEM for less than 9 months over any 12 month period, would not be subject to notice of closure requirements. The new rule would also prohibit speculative notices of closure when the generator has no actual intention to close the plant on the specified date. “This rule is intended to prevent generators from engaging in behaviour that could create uncertainty in the market and act as a deterrent to new investment,” Mr Taylor said.

Government move on power plant closures

Industry Queensland

Related News

ActivEX consolidates REE exploration ground

$70m overhaul kicks off at Tarong North plant

Ballymore bonanza as gold strikes reach 99.8g/t

Get access to breaking mining news, now.