AEMC released Final Determination on Five Minute Settlement on 28th November 2017

This is a back-dated article (published 30th September 2021, just prior to Five Minute Settlement) to provide some context

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Following from the Sun Metals rule change request on 4th December 2015, almost 24 months later  the AEMC released this Final Determination into Five Minute Settlement (on 28th November 2017,):

In this final determination, the AEMC held that:

• • Five minute settlement will commence on Thursday, 1 July 2021. This is a transition period of three years and seven months.
  • Five minute settlement is implemented in the NEM by amending the definition of a trading interval from a 30 minute period to a five minute period. Bidding and offering into the NEM, the online dispatch process, settlement, intervention pricing, the calculation of trading amounts, the calculation of the cumulative price threshold, and periodic energy metering are done on a five minute trading interval basis.
  • The provisions applicable to spot price determination are amended so that a spot price is now determined for each five minute trading interval. The spot price is no longer the time-weighted averaging of dispatch prices across a 30 minute timeframe.
  • A new definition of 30 minute period is created to be a 30 minute period ending on the hour or on the half-hour, and comprising six consecutive trading intervals. This new definition is applied to provisions in the national electricity rules (NER) which should continue to operate on a 30 minute basis. For example, in relation to the projected assessment of system adequacy (PASA) processes, AEMO is required to prepare and publish information for each 30 minute period.
  • AEMO is also required to calculate and publish 30 minute spot prices (calculated in the same way that the current spot price is calculated).
  • Types 1, 2 and 3 meters will need to record and provide five minute data from the commencement date of the rule.
  • Type 4 meters at a transmission network connection point or distribution network connection point where the relevant financially responsible Market Participant is a Market Generator or Small Generation Aggregator will need to record and provide five minute data from the commencement date of the rule.
  • The final rule does not require type 4 (other than other than type 4 metering installations at a transmission network connection point or distribution network connection point where the relevant financially responsible Market Participant is a Market Generator or Small Generation Aggregator), type 4A, type 5 and type 6 meters that are already installed to record and provide five minute data at the commencement date. The data from these meters will be profiled to five minute trading intervals by AEMO.
  • From 1 December 2018, all new and replacement type 4 metering installations will need to be capable of recording and providing five minute data. These meters must be configured to record and provide five minute data from 1 December 2022 at the latest.
  • From 1 December 2019, all new and replacement type 4A metering installations will need to be capable of recording and providing five minute data. These meters must be configured to record and provide five minute data from 1 December 2022 at the latest.
  • Existing meters that generate five minute data are prevented from being replaced with a meter of a lower functionality.
  • AEMO can exempt a Metering Provider from complying with the data storage requirements for types 1, 2 and 3 meters and type 4 meters at a transmission network connection point or distribution network connection point where the relevant financially responsible Market Participant is a Market Generator or Small Generation Aggregator installed prior to 1 July 2021 where it is reasonably satisfied that the Metering Provider will be able to otherwise meet the requirements of the NER.

During the transition period, NEM participants will update metering (if required) and information technology (IT) systems to implement five minute settlement.  It is also expected that most existing hedging contracts will have rolled off and new contracts will accommodate a future implementation of five minute settlement.  AEMO will update its systems during this time and is expected to provide a test environment for participants

… with our emphasis added.

The AEMC Rule Change ‘Five Minute Settlement’ sub-site here provides access to all of the details.

This rule change determination promoted a start date of 1st July 2021 … but this was later delayed to 1st October 2021 (as a result of this delay process).