The reliability safety net provisions of the National Electricity Rules (Clause 3.12.1) allow NEMMCO to procure reserve to ensure that the reliability of supply meets the reliability standard established by the Reliability Panel.
In response to low reserve forecasts in Victoria and South Australia, NEMMCO has conducted a tender process to procure reserve capacity for the Victorian and South Australian regions for the period from 16 January 2006 to 10 March 2006 inclusive.
The reliability safety net tender process is now concluded.
Following consultation with the Victorian and South Australian jurisdictions, NEMMCO has procured a total of 375 MW of reserve capacity. The contracts include conditions for use of the reserve ranging from 1 hour per day to 15 hours per day and limits on the total hours of usage, which have been taken into account in NEMMCO's tender evaluation. The cost of this reserve includes availability, pre-activation and usage components. The total costs will therefore be influenced by the amount of pre-activation and usage. NEMMCO estimates the likely costs to be in a range of approximately $4.4M to $4.9M.
The costs for these reserves will be shared between the affected jurisdictions, being Victoria and South Australia, in accordance with their relative energy demands (expected to be approximately 25% to South Australia and 75% to Victoria). Market customers (retailers and other wholesale customers) are then allocated a share of the regional costs, based on their relative energy consumption during business hours, as set out in Rules clause 3.15.9.
The successful tenderers are:
Successful Tenderer |
Contracted Reserve |
State Electricity Commission of Victoria trading as VicPower Trading |
180 MW |
Energy Response Pty Ltd |
125 MW |
The Australian Steel Company (Operations) Pty Ltd |
55 MW |
Zinifex Port Pirie Pty Limited |
15 MW |
 100Kb |
Invitation to Tender : National Electricity Market Reliability Safety Net - 23 Sep 2005 filename: 190-0013.doc |
93Kb |
Reserve Services Agreement - 23 Sep 2005 filename: 190-0014.doc |