EUAA Submission: Review Of The Form Of The Reliability Standard & Administered Price Cap REL0086
Emily Wood | May 4, 2023
‘… In summary the EUAA:
- Supports the current form of the reliability standard and consider the current form is still the best option in a renewables dominant grid
- Supports continued use of the AER VCR values to assess what consumers are prepared to pay for reliability
- Recommends that the Panel takes account of the impact of jurisdictional schemes designed to achieve reliability to ensures consumers are not paying twice for the same level of reliability
- Recommends that the Panel considers the impact of the Gas Mandatory Code on the setting of the APC
We support the current form of the reliability standard
In our submission to the Panel’s recent review of the reliability standard we strongly supported the retention of the current form of the standard – expressed in terms of the expected USE in a region. We said there1:
“We did not see any material consumer benefit in moving to alternative measures such as loss of load expectation or loss of load probability. Nor do we see any benefit in introducing a supplementary or secondary standard with regards to the monitoring of so called “tail risk” associated with high impact low probability (HILP) events. We understand that historically most of the HILP tail events in the NEM have been security events, not USE events. So, it seems that inclusion of tail events would lead to over estimation of the probability of a USE event occurring and a higher than necessary market price cap. Following careful review of the discussion in the Draft on the changing reliability risk profile, we are not convinced of the case for change from a singular USE based measure for the period to when some form of capacity market will be introduced.
The reliability standard considers reliability events, not security events. The impact of the latter on consumers is much greater than the impact of the former. When combined with distribution network outages, which are the overwhelming majority of outages experienced by consumers, the level of risk from wholesale market reliability events is negligible. We think the Issues Paper does not draw out this distinction enough. We are concerned that the reliability standard, set for the wholesale market, is perceived to be addressing reliability issues on the distribution system where almost all supply interruptions occur. ..’
Please download attachment to read full submission.
