The AEMC is currently considering a rule change proposal from Sun Metals to introduce optional 5 minute settlement into the NEM. The aim of the rule change is to remove the distorted incentives in the current half hourly settlements and to give market participants clearer and sharper opportunities to respond to market needs.
In this Insider, Hugh Bannister reviews the history of the issue and the current proposal from the point of view of how a control system might be designed and implemented. He specifically addresses some of the concerns that might inhibit the introduction of such a change including its impact on metering, on contracting and on AEMO and participant systems generally.
The article concludes that the proposal, with some small but significant adjustments, could be implemented relatively easily and quickly. It also highlights the fact that Frequency Control Ancillary Services (FCAS) could also evolve to smooth operations within the half hour and within the 5 minutes as fast response technologies such as batteries become more significant.
To read this article, please download the PDF version from the link below.