Design of the Day-Ahead Auction of Contracted but Un-nominated Capacity - Final Recommendations

Wednesday, 03rd January 2018

In January 2018, the COAG Energy Council (Energy Council) endorsed the Gas Market Reform Group’s (GMRG) final recommendations on the design of the day-ahead auction of contracted but un-nominated capacity.

The GMRG’s recommendations were developed following extensive stakeholder consultation, with feedback provided by a range of gas producers, retailers, gas users, pipeline service providers, the Australian Competition and Consumer Commission, Australian Energy Market Operator (AEMO), the Australian Energy Market Commission and the Australian Energy Regulator. The design recommendations were also informed by advice from the GMRG’s legal advisor, Johnson Winter & Slattery and economic consultant, NERA Economic Consulting.

A summary of the GMRG’s final recommendations and the feedback provided by stakeholders is provided below. The consultation paper and full submissions received are available on the Day-ahead auction of contracted but un-nominated capacity and reporting framework  page.

Next steps

Before the capacity trading reform package can be implemented, extensive work is required by the GMRG, AEMO and service providers on the following tasks:

  1. Development of legal, regulatory and contractual architecture – this task will involve:

(a) the preparation of drafting instructions for changes to the NGL and the development of the changes that will be required to the NGR, the Regulations and other subordinate instruments to be made by the South Australian Minister to give effect to the package of reforms;

(b) the development of procedures and other subordinate instruments by AEMO; and

(c) the development of a standardised operational GTA by service providers.

  1. Designing, developing and testing the new systems that will be required for the capacity trading platform and the day-ahead auction and conducting industry trials, which will involve AEMO and to some extent service providers.
  2. Developing market guidelines and training material for the market participants.

The GMRG will be responsible for developing the legal architecture set out in (1)(a), while AEMO will be responsible for carrying out the work set out in (1)(b), (2) and (3). 

The GMRG intends to carry out workshops with a range of stakeholders in the week commencing 29 January 2018. The Capacity Trading Reform Package Design Approval and Implementation Information Paper below provides further detail on the workshops and implementation plan.