Beginning October 1, 2023, the Wholesale Electricity Market (WEM) reform has integrated five co-optimised Essential System Services (ESS):

• Regulation services:

  • Regulation Raise

  • Regulation Lower

• Contingency Reserve services:

  • Contingency Reserve Raise

  • Contingency Reserve Lower

• Rate of Change of Frequency (RoCoF) Control Service.

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Costs under the Frequency Co-optimised Essential System Services (FCESS) framework are allocated to Market Participants based on their Regulation Contributing Quantity, which sums the absolute Metered Schedules for their Semi-Scheduled Facilities. This allocation imposes significant charges on generators and restricts their ability to mitigate regulation costs.

During the Energy Transformation Strategy reform, stakeholders voiced concerns about Market Fees and ESS cost allocation. Time constraints prevented the Energy Transformation Taskforce from fully addressing these issues. Some concerns have been tackled through the Electricity Industry (Wholesale Electricity Market) Regulations 2004 Wholesale Electricity Market Amendment (Cost Allocation Reform) Rules 2024, introducing the 'WEM Deviation Method' from the Cost Allocation Review.

Implementation of the WEM Deviation Method will involve creating injection forecasts for Semi-Scheduled Facilities without ESS and Non-Scheduled Facilities. These entities can choose to provide their own injection forecasts instead of relying on defaults from the Australian Energy Market Operator (AEMO). If forecasts provided by participants are not deemed credible, AEMO will utilize default forecasts in WEM scheduling and dispatch processes.

As the amended rules await Ministerial instruction to take effect, Proa is actively preparing its systems to assist generators in submitting injection forecasts during this transition.