AEMO publishes ‘Declaration of Market Suspension’

Posted by Paul McArdle Wednesday, June 15 2022 Topic: 2022 - June - QLD (12th) and NSW, SA and VIC (13th) hit Cumulative Price Cap, 2022 Energy Crisis, Winter 2022 in the NEM

At 14:02 I received an SMS alert from our software informing me that AEMO has suspended the market until further notice.

Here’s Market Notice 97705 … which superseded Market Notice 97704 (issued just moments before that) … and I subsequently note at 14:35 AEMO issued Market Notice 97717 with a correction that:

________________________________________________________________________________________________

Notice ID 97717
Notice Type ID Market suspended in region(s).
Notice Type Description MARKET
Issue Date Wednesday, 15 June 2022
External Reference Correction – Declaration of electricity market suspension
________________________________________________________________________________________________

AEMO ELECTRICITY MARKET NOTICE

Refer to AEMO Market Notice 97705

Typographical error in Market Notice 97705 – reference to NER Clause 3.14.3(s)(3) should read 3.14.3(a)(3).

Manager NEM Real Time Operations

Anyway… here’s Market Notice 97705 as I received it:

——————————————————————-
MARKET NOTICE
——————————————————————-

From : AEMO
To : NEMITWEB1
Creation Date : 15/06/2022 14:04:34

——————————————————————-

Notice ID : 97705
Notice Type ID : MARKET SUSPENSION
Notice Type Description : Market suspended in region(s).
Issue Date : 15/06/2022
External Reference : Declaration of electricity market suspension

——————————————————————-

Reason :

AEMO ELECTRICITY MARKET NOTICE
Declaration of electricity market suspension
AEMO declares the spot market suspended in New South Wales, Queensland, South Australia, Tasmania and Victoria with Market Suspension Schedule Pricing (refer NER clause 3.14.5(b)) from Trading Interval 1405 hrs on 15 June 2022 until further notice.
Dispatch prices for the first one or two dispatch intervals of this market suspension will be reviewed manually.

AEMO has determined that it is necessary to suspend the spot market in all regions under NER clause 3.14.3(s)3) because it has become impossible to operate the spot market in accordance with the provisions of the Rules.
Manager NEM Real Time Operation

——————————————————————-
END OF REPORT
——————————————————————-

With reference to the above, a couple additional points:

(A)  Pricing during Market Suspension

For ease of reference for our readers, the NER Clause 3.14.5(b) … linked here … is copied below:

Pricing during market suspension

Definitions

(a0)In this clause 3.14.5:

suspension node has the meaning given to it in clause 3.14.5(f).

(a)Subject to paragraph (b), if the spot market is suspended in a region then central dispatch and the determination of dispatch prices, spot prices and ancillary service prices in thesuspended region are to continue in accordance with rules 3.8 and 3.9.
(b)If, in AEMO’s reasonable opinion, it is not practicable to operate central dispatch and determine dispatch prices and ancillary service prices in a suspended region in accordance with rules 3.8 and 3.9, AEMO must setdispatch prices and ancillary service pricesfor the suspended region at the prices applicable to the relevant dispatch interval in the current market suspension pricing schedule developed and published in accordance with paragraph (e).
(c)Dispatch prices and ancillary service prices determined in accordance with paragraph (b) for a suspended region:
(1)continue to be subject to the application of clause 3.14.2(d1) and clause 3.14.2(d2) in respect ofadministered price periods, and are to be adjusted (where applicable) in accordance with clause 3.14.2(e);
(2)are not to be adjusted in the circumstances set out in clause 3.9.2(e)(1) or clauses 3.9.2(e)(2) and 3.9.3; and
(3)are not subject to review under clause 3.9.2B.
(d)If the dispatch prices and ancillary service prices in a suspended region are being determined in accordance with paragraph (b), they must continue to be determined in accordance with that paragraph until the earlier of:
(1)the time that the spot market is no longer suspended in the relevant region; and
(2)if AEMO declared the spot market to be suspended for the reason set out in clause 3.14.3(a)(1) or (3), the time that, in AEMO’sreasonable opinion, it is practicable to resume central dispatch and the determination of dispatch prices and ancillary service prices in the suspended region in accordance with rules 3.8 and 3.9; and
(3)ifAEMO declared the spot market to be suspended for the reason set out in clause 3.14.3(a)(2), thetime that, in AEMO’sreasonable opinion, it is practicable to resume central dispatchand the determination of dispatch prices and ancillary service prices in the suspended region in accordance with rules 3.8 and 3.9, provided that theparticipating jurisdiction that directed AEMO under clause 3.14.3(a)(2) has agreed to the resumption of central dispatch and the determination of dispatch prices and ancillary service prices in the suspended region in accordance with rules 3.8 and 3.9.
(e)AEMO must:
(1)develop in accordance with the Rules consultation procedures a methodology to be used by AEMO (market suspension pricing methodology) to prepare and update schedules containing reasonable estimates of typical market prices during the periods to which the schedules relate (market suspension pricing schedule);
(2)develop and update the market suspension pricing schedule in accordance with the market suspension pricing methodology, to be used during any period in which the spot marketis suspended; and
(3)publish the market suspension pricing methodology promptly after it has been developed and publish the market suspension pricing schedule at least 14 days prior to the first day to which the schedule relates.
(f)If a dispatch price is set in accordance with paragraph (b) at a regional reference node (suspension node), then dispatch prices at all other regional reference nodes connected by one or moreregulated interconnectors that have a net energy flow towards the suspension node must not exceed the dispatch price in the suspended region divided by the average loss factorthat applies for energy flow in that direction for that dispatch interval.
(g)Paragraph (f) does not apply to a dispatch price at another regional reference node that has been replaced in accordance with clause 3.9.2B or where clause 3.8.21(b) applies.
(h)AEMO must use reasonable endeavours to ensure that any adjustments required to dispatch prices so that they do not exceed the limits set by paragraph (f) are finalised as soon as practicable but in any event by the end of the next business day following the day on which the spot market in the region ceased to be suspended
(i)AEMOmust determine the average loss factor applicable to paragraph (f) by reference to theinter-regional loss factor equations relating to the relevant regulated interconnectors.

So now we’ll all need to be learning how Compensation also works under Market Suspension.

 

(B)  AEMO’s ‘Guide to Market Suspension in the NEM’

The AEMO’s ‘Guide to Market Suspension in the NEM’ is a useful reference.

 

(C)  Has Market Suspension happened before?

Yes it has … compiling a list as another article

 

(D)  Some broader discussion about Market Suspension

Some of the commentary under my LinkedIn post here about the suspension might prove useful…. and potentially also here on Twitter (though tends not to be as detailed).

 

I’m guessing that this might take ages to resolve!

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About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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