Project EnergyConnect – Market Integration project
Background
AEMO supports Australia’s complex and rapid energy transformation towards net zero emissions, enabling low-cost fired renewable energy and essential transmission to provide customers in the NEM with reliable, secure and affordable power. ElectraNet and Transgrid are partnering to deliver the 900km long energy interconnector Project EnergyConnect, connecting South Australia and New South Wales with an added connection into Victoria, to deliver a range of direct benefits for consumers including lower power prices and improved energy security.
Project EnergyConnect is delivered over two stages:
- Stage 1 150 MW bi-directional capacity connection: between Robertstown and Buronga, release from October 2024.
- Stage 2 Combined transfer limit across Heywood and PEC interconnectors: 1,300 MW import into South Australia and 1350 MW export. Comprises the connection between Buronga and Wagga Wagga. Anticipated full capacity from Q4 2027, with inter-network testing from 1 July 2026.
Once the commissioning of Stage 2 is complete, it will create a parallel transmission configuration between three adjacent regions which presents new challenges for the NEM, especially for the way negative inter-regional settlement residue is managed.
AEMO has undertaken stakeholder consultation on Project Energy Connect Market Integration, with the final recommendations published on 9 February 2024. Further, a Rule Change Proposal was submitted to AEMC on 23 February 2024, seeking to recommend changes to the existing negative inter-regional settlement residue process.
AEMO has established the Project EnergyConnect – Market Integration (PEC-MI) project under the NEM Reform Program to implement resulting system and procedure changes collaboratively with industry.
PEC-MI is delivering market design changes to accommodate Stage 2. This includes: changes to AEMO’s systems, a rule change for negative residue management and relevant procedure changes.
Scope
The addition of PEC fundamentally changes elements of market design, and AEMO’s integration of PEC Stage 2 into AEMO’s systems is designed to:
- Use the interconnector dispatch integration model
- Revise existing automated Negative Residue Management constraints
- Limit the application of interconnector clamping, to when aggregate loop IRSR is negative. This would limit the extent interconnector clamping is a driver of dispatch outcomes.
- Reallocate negative inter-regional settlement residues when settlement, in aggregate, is in surplus across the three interconnectors for each trading interval.
- Ensure negative inter-regional settlement residues reallocated are payable by the importing TNSP
The project will also include PEC into the Settlement Residue Auction (SRA).
Industry engagement
This initiative forms part of NEM Reform Program and market participants can get involved by visiting:
High Level Impact Assessment (HILA)
Indicative Timeline
| Date | Element | Description |
|---|---|---|
|
December 2023 |
Completing the South Australian side of Project EnergyConnect |
Construction complete on South Australian side of new electricity interconnector |
|
9 Feb 2024 |
PEC Market Integration Final Paper |
Final Report published following consultation. The Final Report set out the recommended approach to negative residue management and allocation, as well as analysis and comparison of approaches to dispatch integration. It included responses to submissions received |
|
23 Feb 2024 |
Rule change submitted to AEMC |
Rule Change Proposal submitted to AEMC which seeks to address certain market integration issues that would otherwise arise on the commencement of PEC Stage 2, currently expected to be delivered in early 2026 |
|
September 2024 |
PEC-1 Capacity Release |
Inter-network testing of Stage 1 is scheduled to begin following construction completion of Stage 1 works on the NSW side by Transgrid |
|
November 2024 |
Completing the Stage 1 works on the NSW side of Project EnergyConnect |
Release of up to 150MW of power transfer capability, subject to successful testing |
|
December 2024 |
AEMC Draft Determination |
AEMC Draft Determination on rule which seeks to address certain market integration issues that would otherwise arise on the commencement of PEC Stage 2 |
|
March 2025 |
AEMC Final Determination |
|
|
March 2025 - August 2025 |
SRA Rule Consultation (6mths if non urgent) |
Including PEC into SRA Rules |
|
April 2025 - October 2025 |
Procedure changes consultation |
Procedure consultation, to accommodate changes to NER 3.6.5 and to be ready for PEC-2 |
|
October 2026 |
PEC 2 inter-network |
Inter-network testing of PEC Stage 2 is scheduled to begin following construction completion of PEC |
|
October 2027 |
Indicative Cut-over to NEW |
AEMO’s system changes are completed and ready for PEC-2 Capacity Release |
|
2027 |
PEC-2 Capacity Release completed |
Completion of Stage 2 works on the NSW side of Project EnergyConnect |
Record of activities
Procedure Changes
AEMO’s Procedures, guidelines and other documents that require changes include:
- SO_OP_3705 Dispatch Procedure
- Automation of negative residue management
- Methodology for the allocation and distribution of settlements residues
- NEM Transmission Network Service Provider Negative Settlements Residue
Further information
For more information, please contact NEMReform@aemo.com.au.