Battery boost: AEMO gives green light to 5-minute settlements from October

One of the biggest changes to Australia’s energy market rules, the switch to a five-minute settlement period, has been given the green light by the Australia Energy Market Operator to come into play in October.

AEMO said that after a detailed risk and readiness assessment the National Electricity Market was ready to proceed with the switch as planned, and without delay, paving the way for investment in new technologies like battery storage.

Historically, generators participating in the NEM have operated on the basis of auctions held every 5-minutes, but with the payment settlement period averaged over a longer, 30-minute interval – a difference that has created the potential for market gaming, while also undermining the potential of fast-response technologies like battery storage and demand response.

A request to change the rules to align the auction intervals was signed off by the Australian Energy Market Commission in 2017 and, despite working hard to meet an October 2021 start date, AEMO had recently raised concerns that the market operator itself, or some market participants, might not be ready.

“This is an important market reform that reflects the evolving energy system and an initiative that aligns very closely to AEMO’s priority areas as we navigate the energy future to the benefit of the market and all consumers,” AEMO’s Chief Market Services Officer, Violette Mouchaileh, said.

“Informed by, and completed in consultation with, market participants, AEMO’s comprehensive risk and readiness assessment measured essential criteria required for rule commencement – concluding that the NEM is on track for market start in October,” Mouchaileh added.


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