May 12, 2023
From the 31st of March 2023, AEMO has advised that Small Generation Aggregators (SGA's) will be able to "register to participate in the Frequency Control Ancillary Services (FCAS) markets, increasing competition and resource availability."
The first of the Australian Energy Market Operator's (AEMO) 'go-live' milestone reforms to the National Electricity Market (NEM), signals an important adjustment to previous regulation around SGA configuration and capabilities.This direction follows the AEMC’s 2021 Final Determination on Integrating Energy Storage Systems into the NEM, with a shift from SGA’s to Small Resource Aggregators (SRA’s) and eventually transitioned to Integrated Resource Providers (IRP’s); opening access and opportunity for these participants to support competition and realise additional value streams. Beyond this baseline release in March 2023, mid 2024 will likely also see an expansion of the retailand settlement systems to allow for full integration, with trials commencing February 2024.
AEMO has released a raft of resources to support this transition, including a refreshed Fact Sheet and information to assist SGA’s understand the opportunities and requirements of participating in ancillary services.
As SGA configurations within Embedded Networks become more commonplace, the regulation of these opportunities is beginning to catch up. Within the Australian Energy Regulator’s 2021 Consultation paper, it addressed the potential adjustment of how SGA’s within Embedded Networks were regulated – proposing that this may fall out of the scope of the Network Exemption guidelines. However, the latest Draft Guideline (closed for submissions 9 December 2022) indicates a retention of visibility for these configurations through the exemption framework.
Embedded Networks allow for relatively easy access of SGAs to the market via an on-market child connection point, allowing small generating units to be configured on a second connection points to access the NEM. Currently, these Embedded Networks can be set up specifically for the purpose of creating and participating in an SGA scheme – although, an existing Embedded Network can still feature an SGA child connection point. Regardless, these Embedded Networks fall within the same regulatory categories and will require an Embedded Network Manager to create the NMI. Similarly, all relevant conditions of Embedded Networks under the relevant activity class will apply.
For more information on SGA’s in Embedded Networks – be sure to read the information on our website linked below, along with the AEMO Fact sheet and resource documents.
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