PIAC lodged a submission to the Australian Energy Market Commission’s (AEMC) consultation on proposed changes to the obligations on smaller generators that participate in central dispatch.
PIAC does not support the rule change proposal. If this proposed change were implemented, these smaller generators would incur significant new capital and operating costs and hence discourage these projects from entering the market or substantially increase their overall costs. This, in turn, would place significant upward pressure on wholesale prices.
It is highly unlikely any potential benefit from more efficient dispatch and operation as a result of the proposed rule change would outweigh this negative impact on competition in wholesale markets.
While we acknowledge there is a need to optimise price signals for dispatchability, it is premature to make a change now. It is more appropriate that any change is made as part of the ESB’s broader Post-2025 market design.