Five Minute Settlement (from 1st October 2021)

From the start of the NEM (13th December 1998) through until 30th September 2021, the NEM operated with 5 minute dispatch and 30-minute settlement.   However from 00:00 on Friday morning, 1st October 2021, the NEM transitioned into Five Minute Settlement.

 

(A)  A brief history of Five Minute Settlement

In this table, which we have pieced together now and will expand in future (as time permits – and if readers are interested), we sum up a reverse-chronology of events…

 

Date Key point of evolution
Through Q4 2021

As time permits we will post analysis on WattClarity about some of the outcomes .

Friday 1st October 2021

From 00:00 on Friday 1st October 2021, Five Minute Settlement commenced.

We documented this at the time with an article very early on Friday 1st October … and then with a quick review of bids the following day.

1st September 2021

Like any large project (and particularly any large IT project) it was a prudent precautionary principle to ensure that there was a contingency plan in place for any unforeseen delays or difficulties encountered in the final stage of initiation.  This was completed through a precautionary Rule Change submitted by AEMO to AEMC, which AEMC duly noted.

However on Wednesday 1st September 2021, following a period of focused industry-wide testing and remediation managed by AEMO, AEMO announced ‘all systems go, for Five Minute Settlement’.

9th July 2020

As a result of the larger difficulties introduced by the COVID-19 pandemic, the AEMC issued a 3-month delay to the anticipated start date … pushing this back to 1st October 2021.

28th November 2017

After considering the Sun Metals rule change over almost 24 months, the AEMC issued a Final Determination for the implementation of Five Minute Settlement with a start date of 1st July 2021.

The AEMC noted:

Five minute settlement provides a better price signal for investment in fast response technologies, such as batteries, new generation gas peaker plants and demand response.

4th December 2015

Sun Metals Corporation submitted a rule change request to the AEMC for the implementation of Five Minute Settlement, with the proposal to utilise a voluntary opt-in basis (and utilise SCADA meter readings) in an attempt to keep implementation costs low.

21st February 2003

Even in the early years of the NEM there were deliberations about how to resolve the ‘5/30 issue’ through some change to the market dispatch and settlement arrangements.

One example was this final report by NEMMCO from 21st February 2003.

13th December 1998

The NEM commenced with five minute dispatch and thirty minute settlement.

pre-NEM

Even prior to the implementation of the NEM (e.g. in the VicPool market, the SEM and the QIM) the markets operated with five minute dispatch and thirty minute settlement.

Will add more in, as time (and interest) supports…

 

(B)  Coverage of Five Minute Settlement here on WattClarity®

First and foremost, we have created this ‘Headline Event’ for Five Minute Settlement which will be used to categorise some articles we write including some early results we see from the transition to 5MS.

In addition to those higher-profile articles, you might also find useful context in both:

1)   Articles tagged withthe 5/30 issue, which was terminology coined to deal with the perverse behaviours, and outcomes, that the mismatch of trading and dispatch intervals delivered to the NEM … hence the underlying argument for aligning them.

2)   Also articles tagged directly with ‘Five Minute Settlement‘ are also here.