EUAA Submission: Allowing AEMO To Accept Cash As Credit Support – Draft Rule
Emily Wood | May 15, 2025
‘…Thank you for the opportunity to make this brief submission to the Allowing AEMO to accept cash as credit support, Draft Rule. The EUAA are supportive of the draft rule.
In our submission to the Consultation paper (ERC 0403) we stated our support for this rule change because:
• If this rule did not proceed we were concerned that serious immediate risks to stable supply of electricity. In the case of Delta Electricity, immediate risks to supply and system services like inertia and system strength, will arise if they are forced to withdraw capacity before sufficient replacement assets are in place (including assets the provide MWh, dispatchable capacity and system services).
• If this rule did not proceed we were concerned that serious medium to long-term risks to stable supply of electricity if the timely deployment of sufficient gas fired peaking plant is compromised.
• We believe that the risk to stable supply of electricity (and system strength services) is far greater than the risks to AEMO from insolvencies if cash is provided as credit support.
• In addition to serious risks to stable supply of electricity supply, if more flexible prudential arrangements are not in place then the ability of new market entrants would be compromised which in turn would lead to less competition and potential concentration of market power into the hands of a small number of vertically integrated market participants.
• We do not see that this rule change would have a negative impact on emissions (i.e. emissions would not be greater than they otherwise would have been) as there is no indication that this rule change would extend the life of the Delta Electricity asset beyond its current scheduled retirement date.
• While some have argue that prematurely forcing Delta Electricity from the market would reduce emissions faster than they otherwise would have, we are not convinced of this as other dispatchable generation would need to be engaged to maintain energy supply. This would include greater output from other thermal generation including diesel generators, forcing emission higher in the short to medium-term….’
Please download attachment to read full submission.
