Our 2012 review of the effectiveness of the Wholesale Electricity Market (WEM) highlighted some of the changes that the energy market had recently gone through with the implementation of the competitive balancing market. This provided opportunities for individual power producers (IPPs) to participate in balancing energy provision alongside with Verve Energy. A newly established market for the provision of Load Following Ancillary Services (LFAS) ensuring IPPs could compete with Verve Energy as a provider. During this report we focused mainly on issues surrounding the operation of the capacity market including:
- role of Reserve Capacity Auctions
- Capacity Credits assigned by the IMO (Independent Market Operator)
- responsiveness of the Reserve Capacity Price to market conditions
- treatment of Demand Side Management as a separate product/service
- incentives for plant availability and retirement of inefficient plant
Our discussion paper was published in November 2012 and we received 17 submissions from the public. Our report was delivered to the Minister for Energy and published on our website in June 2013.