Settlements residue arises in the NEM because the amount required to be paid by Market Participants (generally Market Customers) to AEMO in respect of spot market transactions will generally differ from the amount required to be paid by AEMO to other Market Participants (generally Market Generators) for those spot market transactions.
There are two types of settlements residue:
| Intra-regional settlements residue is | Inter-regional settlements residue is |
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Inter-regional settlements residue is available for purchase at auction by certain participants in the NEM.
The Settlements Residue Auction is overseen by the Settlement Residue Committee.
For those interested in participating, the Guide to the Settlements Residue Auction provides an overview of the auction process. AEMO has ceased to publish an annual Information Memorandum and urges intending participants to familiarise themselves with the relevant parts of the National Electricity Rules and the Auction Rules, and to seek independent advice prior to making any decision to participate.
Participation is not only contingent upon meeting relevant registration criteria, but entering into an Auction Participation Agreement, as well.
AEMO holds an exemption from the requirement to hold an Australian Financial Services Licence in relation to the auction process.
For further information on the Settlement Residue Auction, please contact: Brian Nelson, Senior Manager Electricity Market Performance.
Other relevant information includes the following:
