Instantaneous reserve cost allocation

Instantaneous reserve cost allocation to groups of generating units

Upcoming Open Closed Decision
View cross-submissions Cross-submissions closed 30 August 2024
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Decision

We have decided to amend the Electricity Industry Participation Code 2010 so that more generators are required to pay an appropriate share of the instantaneous reserve procurement costs. This change will:

  • create a more level playing field for different types of technologies and asset configurations to promote competition and efficient investment in future generation
  • incentivise investments that reduce system risk and increase power system stability and resilience
  • reduce costs by reducing the need to procure instantaneous reserve and the resulting costs that are passed on to consumers in the long run.

The new cost allocation methodology will come into effect on 1 October 2026.

We would like to thank everyone who engaged with this consultation. Feedback from submitters has been incorporated into the final decision.

Decision paper

Instantaneous reserve cost allocation to groups of generating units - Decision paper

Instantaneous reserve cost allocation to groups of generating units - Decision paper

Consultation

We would like to thank all those who engaged with this consultation. Submissions have been published below and are being carefully considered to inform our next steps.

This consultation seeks feedback on our proposal to update the way instantaneous reserve procurement costs are allocated to generators. We consider this would help ensure an affordable and reliable supply of electricity to consumers.

Instantaneous reserve is procured to make sure that consumers’ electricity supply is not impacted by an event causing a sudden loss of generation. Historically, the costs of procuring instantaneous reserve have been allocated to most of the parties whose potential loss of generation causes the need for instantaneous reserve procurement.

However, with evolving generation technology, there has been an increasing number of potential event causers who are not required to pay their share of the total instantaneous reserve procurement cost.

Our proposal intends to ensure that more of the causers of instantaneous reserve procurement are required to pay an appropriate share of the instantaneous reserve procurement costs, both now and in the future.

Consultation paper

Instantaneous reserve cost allocation to groups of generating units - Consultation paper

Instantaneous reserve cost allocation to groups of generating units - Consultation paper

Submissions

Download all submissions (.zip)

Cross-submissions