Consultation on amending the Code to allow batteries to participate in the reserves market
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Today the Authority begins consulting on amending the Electricity Industry Participation Code (the Code) so that grid-connected batteries can participate fully in the national reserves market. This would mean that network-connected battery energy storage systems could provide instantaneous reserve.
Grid-scale batteries already participate in the wholesale electricity market as either generation and/or dispatchable demand. But batteries cannot offer instantaneous reserve because the Code is technology-specific and does not provide suitable procurement arrangements for batteries.
Increasing the amount of instantaneous reserve in the market is good for competition and enhances the capacity of the grid to securely and reliably transmit electricity around the grid and between the two main islands.
The target date for enabling batteries to offer instantaneous reserve to the system operator is 1 April 2022 as there are several other implementation steps that must occur.
The Authority will be consulting for four weeks on these changes. More information on making a submission is available on the Authority’s website.
We will be holding an online briefing on the proposal at 11.00am on Friday, 16 April 2021. Please register your interest in attending at battery@ea.govt.nz and we will send you information on how to join the briefing.
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Internal transfer pricing and profitability consultation paper
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The Authority has published a consultation paper on proposed improvements to the disclosure of internal transfer pricing – the price used by a generator-retailer to determine the profit allocated between the generation and retailing parts of their business.
To help improve information disclosure, we are proposing a Code amendment to mandate that large integrated generator-retailers publish their internal transfer prices and methodology annually. We are also seeking feedback on the merits of a Code amendment for segment gross-profitability reporting for retail electricity businesses.
The proposals are aimed at helping to build trust and confidence in the competitive nature of the retail electricity market.
We will be holding a briefing on 29 April 2021. Please email wholesaleconsultation@ea.govt.nz to register your interest in attending in person or by video conference. Further details will be in a future Market Brief.
The consultation closes at 5pm on Tuesday, 18 May 2021.
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Proposal to replace the high standard of trading conduct provisions with a new rule - submissions published
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The Authority consulted on a proposal to replace the high standard of trading conduct provisions with a new rule. Submissions closed on 23 March 2021.
Thank you to everyone who provided a submission. Submissions are now published on our website.
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Reminder: Code amendment changing the definition of 'disclosure information' went live on 6 April 2021
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The Authority has urgently amended the definition of ‘disclosure information’ in the Code.
The previous definition of disclosure information in the Code was:
disclosure information, in relation to a participant, means information that—
(a) is about the participant; and
(b) is held by the participant; and
(c) the participant expects, or ought reasonably to expect, if made available to the public, will have a material impact on prices in the wholesale market.
The Code amendment changes paragraph (c) of the definition of disclosure information to read ‘likely to have a material impact on prices’ instead of ‘will have a material impact on prices’.
The Authority amended the Code because of a recent Rulings Panel decision which interpreted that the previous definition of disclosure information required a high level of certainty that information will have a material impact on prices before information must be disclosed.
This amendment was made under urgency because if left to stand, materially less information could be disclosed to the market. This is particularly important in the context of an evolving dry year risk in 2021.
The updated guidelines are available on the website.
The urgent Code amendment came into force on 6 April 2021. It will expire 9 months later as required by the Act. Later this year, the Authority will issue a consultation document for a permanent Code amendment as per section 39 of the Act.
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Draft determination of the causer of the 30 October 2020 under-frequency event
Ending: 13/04/2021 5pm
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Proposed Actions to Correct: UTS 2019
Ending: 27/04/2021 5pm
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Battery energy storage systems offering instantaneous reserve
Ending: 06/05/2021 5pm
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Internal transfer pricing and profitability
Ending: 18/05/2021 5pm
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Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860 Email: communications@ea.govt.nz
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