Wholesale market arrangements for battery energy storage systems

We’re seeking feedback on options to improve wholesale market arrangements for utility-scale battery energy storage systems (BESS).

As Aotearoa New Zealand transitions to a more variable power system, BESS will play a critical role in maintaining security and resilience. They can help balance intermittent generation from solar and wind, support efficient investment, and enable consumers to benefit from new opportunities. To unlock these benefits, regulatory settings must be fit for purpose.

We are consulting on options to address four issues where current market arrangements do not fully reflect the unique characteristics of BESS:

• Dispatch requirements for BESS when charging: the rules for following dispatch instructions do not recognise that BESSs are highly controllable assets.
• Bid and offer forms for BESS: the rules for BESSs submitting bids and offers, and the System Operator’s tools for sending dispatch instructions, do not recognise BESS as single entities that can both generate and consume
• Gate closure arrangements for BESS: The System Operator’s security assessment tools and the rules for BESSs finalising their bids and offers do not recognise that the optimal operation of BESSs is unpredictable as it depends on limited storage and expectations of future prices.
• Constrained off payments for BESS: The wholesale market financial compensation rules do not recognise that BESSs are highly controllable assets.

We welcome your feedback by 5pm Tuesday 23 December.