The Authority has made an urgent Code amendment to impose restrictions on very large electricity contracts that have the ability to shift market prices.
The urgent Code amendment will come into force the day after it has been Gazetted.
The urgent Code amendment, which is an interim response to a potential issue observed by the Authority during its review into competition in the wholesale market, will prohibit generators from giving effect to a contract of net 150MW or more unless certain conditions are met.
Those conditions are:
- the contract allows the buyer to onsell any unused electricity under the contract without the load user being subject to any worse terms than if it had consumed the relevant quantity itself; or
- the net value of the contract is positive – i.e. the direct value to the generator of the contract exceeds the value of the generator’s best alternative; or
- the Authority has provided clearance of the contract
The Authority has made the amendment urgently in accordance with section 40 of the Electricity Industry Act 2010.
Urgent Code amendments do not require consultation but expire nine months after coming into force.
The Authority has begun consultation on a proposed permanent Code amendment and details on how to make a submission and the consultation paper itself are available on our website.
The problem definition and rationale for the proposed permanent amendment as set out in detail in the further consultation paper also applies to the urgent amendment.
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