Property rights for load management
The outcomes from this work are being implemented under the Model Use of Systems Agreement and the Power System Operations & Common Quality workstream.
Load management represents an opportunity to accommodate growth in electricity demand at a cost considerably less than the cost of developing supply side assets.
Some electricity industry stakeholders believe that capture of the potential value of load management is, or has potential to be, inhibited by the property rights of participants.
The Commission's position can be summarised as:
- it is not necessary to regulate to prescribe minimum contract terms or to reallocate ownership of load control assets among participants;
- the following principles should guide participants and the Authority in their respective approaches to property rights for load management:
- management of load for system security purposes is of paramount importance;
- unless there is clear evidence of market inappropriateness (as in the case of AUFLS for low frequency, high impact events) or market failure, load management rights should be determined by market mechanisms;
- unless there is compelling evidence of negative consequences from the market power of the property rights' owners, regulatory intervention in the form of redistribution of such property rights is not appropriate;
- clear and adequate investment signals from the electricity market arrangements are essential for load management investment and participation; and
- the potential for the hierarchy of value of load management to change over time and location should be accommodated by allowing market capabilities for trading of rights to develop;
- further work should be undertaken on developing guidelines or model contracts and assist with the development of industry protocols to help participants negotiate contracts that set out participants' rights to manage load that will ensure load management is put to its highest value use; and
- further work should be undertaken to:
- address inadequate load management price signals; and
- work with the system operator on AUFLS arrangements to improve load management opportunities and outcomes.
analysis-position.pdf | pdf | 152 KB | Last Changed: 26/10/2010 9:03pm
This page is related to: Priority Projects.