The power market is changing. From 1 July 2021, you’ll enjoy the benefits of a five-minute settlement period, which will create more accuracy and reliability within the electricity system, as well as drive revenue for your business.
How does it currently work?
The physical electricity system consists of AEMO dispatching electricity and generators bidding to supply electricity in five-minute blocks. Every 30 minutes, the bidding is settled by averaging the prices of the five-minute blocks. This is the price retailers and large electricity users pay.
However, this means that generators and large energy users could be responding to price signals 25 minutes after the physical electricity system needs a response.
What will the change mean?
Moving to a five minute settlement will align the market’s price signal with the physical electricity system. This means faster response time especially with demand response technologies like our kWatch Intelligent Controller – and the power system will be able to operate more dynamically and efficiently. It will further reward customers who respond to demand peaks, result in more efficient bidding, operational decisions and investments, and ultimately lower wholesale costs.
The industry is gearing up to make this change, and between now and 2021, we will have the time to build and develop the appropriate technologies to make it all happen. AEMO will work closely with industry to develop an implementation plan over the next three years.
Check out this great infographic from the Australian Energy Market Commission