Generator Classification and Exemptions Guide Final (1)

GUIDE TO NEM GENERATOR CLASSIFICATION AND EXEMPTION

PUBLISHED: AUGUST 2014


Australian Energy Market Operator Ltd ABN 94 072 010 327 www.aemo.com.au [email protected]

NEW SOUTH WALES QUEENSLAND SOUTH AUSTRALIA VICTORIA AUSTRALIAN CAPITAL TERRITORY TASMANIA

Copyright 2014. Australian Energy Market Operator Limited. The material in this publication may be used in

accordance with the copyright permissions on AEMOs website.


AEMO August 2014 Page 2

IMPORTANT NOTICE

Purpose

AEMO has prepared this document to provide information about the classification and exemption of generators in

the National Electricity Market, as at the date of publication.

Disclaimer

This document or the information in it may be subsequently updated or amended. This document does not

constitute legal or business advice, and should not be relied on as a substitute for obtaining detailed advice about

the National Electricity Law, the National Electricity Rules, or any other applicable laws, procedures or policies.

AEMO has made every effort to ensure the quality of the information in this document but cannot guarantee its

accuracy or completeness.

Accordingly, to the maximum extent permitted by law, AEMO and its officers, employees and consultants involved

in the preparation of this document:

make no representation or warranty, express or implied, as to the currency, accuracy, reliability or

completeness of the information in this document; and

are not liable (whether by reason of negligence or otherwise) for any statements or representations in this

document, or any omissions from it, or for any use or reliance on the information in it.



CONTENTS

IMPORTANT NOTICE 2

1 INTRODUCTION 5

1.1 Purpose 5

2 GENERATOR CLASSIFICATIONS 6

2.1 Generator Classifications 6

2.2 Examples of generating unit classifications 7

2.3 Loss Factors 8

2.4 Scheduling 9

2.5 Fuel source and technology type 9

3 GUIDELINE ON EXEMPTION FROM REGISTRATION AS A

GENERATOR 10

3.1 Purpose 10

3.2 AEMOs power to make this guideline 10

3.3 Exemptions generally 11

3.4 Multiple functions and parties 11

3.5 Settling on market where an applicant would otherwise be exempt 12

3.6 Standing exemption for generating systems with nameplate rating of less than 5 MW 13

3.7 Application for exemption for generating units or generating systems with a nameplate rating of less than 5 MW 14

3.8 Application for exemption requirement for generating systems with a nameplate rating of more than 5 MW but less than 30 MW 14

3.9 Application for exemption for generating systems with a nameplate rating more than 30 MW 14

4 AEMOS POLICY ON REGISTRATION AS A NON-MARKET

GENERATOR 15

4.1 Introduction 15

4.2 Policy 15

4.3 Meaning of normal conditions 16

4.4 Purchase by both customer and local retailer 16

4.5 Meaning of at the same connection point 16

5 AEMOS POLICY ON CLASSIFICATION OF GENERATING

UNITS AS NON-SCHEDULED GENERATING UNITS 17

5.1 Introduction 17

5.2 The Policy 17

5.3 Conditional approval 18



6 AEMO'S POLICY ON CLASSIFICATION OF A GENERATING

UNIT AS A SEMI-SCHEDULED GENERATING UNIT 19

6.1 Introduction 19

6.2 Policy 19

7 AEMOS POLICY ON GENERATORS REGISTERING AS

CUSTOMERS 20

7.1 Policy 20

7.2 Examples of the application of the policy 20

7.3 Multiple points of connection to the network 21

7.4 Pump storage schemes 23

7.5 Customer load other than that used in an activity associated with the relevant generating system24

7.6 Impact of Connection Point Classification 25

8 FUEL SOURCE AND TECHNOLOGY TYPE 27

8.1 Introduction 27

TABLES

Table 1: examples of generating unit classification 7 Table 2: common fuel source types 27 Table 3: common technology types 29

FIGURES

Figure 1: single point of connection to the network 20 Figure 2: local connection 21 Figure 3: remote connection 21 Figure 4: local and remote connection 22 Figure 5: single point of connection 23 Figure 6: multiple points of connection 23 Figure 7: single connection point 24 Figure 8: retail supply 25



1 INTRODUCTION

1.1 Purpose

This is a plain language guide, assisting any person seeking to register with AEMO as a generator.

Information about NEM participant categories is set out in Chapter 2 of the National Electricity Rules (Rules).

This guide has been developed to help registration applicants understand generator classifications and exemptions

and describes AEMOs policies relating to generator classifications. Where there is a discrepancy between the

information in this document and the Rules, the Rules takes precedence.

Italicised terms are defined in the Rules.

For more information about registration, please contact AEMOs Information & Support Hub

([email protected]) or call 1300 236 600.



2 GENERATOR CLASSIFICATIONS

2.1 Generator Classifications

Any person who owns, controls or operates a generating system connected to a transmission or distribution network must register as a generator, except where they meet the criteria for an exemption. Exemptions may apply for certain generating systems under 5 MW, or under 30 MW with annual exports below 20 GWh. Section 3 provides a guideline on exemption from registration as a generator.

In relation to each of their generating units, registered generators must be classified as either

market or non-market:

Market: A market generator must sell all sent out electricity through the market, and

accept payments from AEMO for sent out electricity at the spot prices

applicable to its connection point. A generator must be classified as a market

generator unless all of its electricity output is purchased by a local retailer or

customer at its connection point.

A market generator with relevant capabilities can also classify its units as

ancillary service generating units.

Non-market: A generator whose entire electricity output is purchased by a local

retailer or customer at its connection point must be classified as a non-market

generator. A non-market generator is not entitled to receive payment from

AEMO for any electricity sent out at its connection point, except for any

electricity sent out in accordance with a direction issued by AEMO to a

scheduled generator. AEMOS policy on registration as a non-market

generator is set out in Section 4.

Each market and non-market generator must further be classified as either scheduled, non-

scheduled or semi-scheduled:

Scheduled: A generator with an aggregate nameplate capacity of 30 MW or more is

normally classified as a scheduled generator if it has appropriate equipment

to participate in the central dispatch process managed by AEMO.

Non-scheduled: A generator will normally be classified as a non-scheduled generator if:

Its primary purpose is for local use and the aggregate sent out

generation rarely, if ever, exceeds 30 MW, or

Its physical and technical attributes make it impracticable for it to

participate in central dispatch.



Non-scheduled generators do not participate in the central dispatch

process, but AEMO can specify additional conditions which must be

complied with, usually for power system security reasons. AEMOS policy

on classification of generating units as non-scheduled generating units is

set out in Section 5.

Semi-scheduled: A generating system with intermittent output (like a wind or solar farm),

and an aggregate nameplate capacity of 30 MW or more is normally

classified as a semi-scheduled generator unless AEMO approves its

classification as a scheduled generating unit or a non-scheduled generating

unit. AEMO can limit a semi-scheduled generators output in response to

network constraints, but at other times the generator can supply up to its

maximum registered capacity. AEMO's policy on classification of a

generating unit as a semi-scheduled generating unit is set out in Section 6.

The table below provides examples of the generator classification and exemption categories.

Note that the examples do not specify all of the criteria that need to be met.

Typical Capability Examples

Exempt Less than 5 MW, all purchased by a local retailer or a customer located at the same connection point (automatic exemption)

1 MW backup diesel generator in a high-rise building

Less than 30 MW, all purchased by a local retailer or a customer located at the same connection point and annual export less than 20 GWh (application required)

20 MW biomass-fuelled generator with limited fuel supplies

Non-scheduled

Non-market Less than 30 MW, all purchased by a local retailer or a customer located at the same connection point

10 MW, all purchased by a customer at the same connection point

Market Between 5 MW and 30 MW, with some or all sent out energy sold in the NEM

10 MW generator supplying the wholesale market

Semi-scheduled

Non-market Intermittent output, greater than 30 MW, all purchased by a local retailer or a customer located at the same connection point

150 MW wind farm, all purchased under contract to a local retailer

Market Intermittent output, greater than 30 MW, with some or all sent out energy sold in the NEM

150 MW wind farm supplying the wholesale market

Scheduled Non-market Greater than 30 MW, all purchased by a local retailer or a customer located at the same connection point

40 MW hydro station, all purchased under contract to a local retailer

Market Greater than 30 MW, with some or all sent out energy sold in the NEM

2000 MW power station supplying the wholesale market

2.2 Examples of generating unit classifications

Table 1: Examples of generating unit classification

The following examples clarify the generating unit classification system.



Description Classification

500 kW solar panel and AC inverter Exempt

1 MW backup diesel generating unit in a high rise building Exempt

10 MW thermal station under contract to a local retailer or customer located at the

same connection point

Non-scheduled non-market

generator

10 MW power station supply for an electrically isolated country town Exempt

10 MW wind farm with all output sold to local retailer Non-scheduled non-market

generator

30 MW generating unit that exports up to 3 MW into a distribution system Non-scheduled market generator

30 MW generating unit that exports up to 3 MW into a distribution system that is

entirely purchased by the local retailer


generator

40 MW system of generating units internal to a major manufacturing plant that is

never expected to export energy


generator

40 MW hydro station under contract to a local retailer for all of its output Scheduled non-market generator

45 MW generating unit using 10 MW locally within its own site Scheduled market generator

45 MW generating unit using 30 MW locally within its own site non-scheduled market generator

45 MW generating unit using 30 MW locally within its own site and selling all

export to the local retailer or customer at its connection point


generator

45 MW generating unit using 10 MW locally within its own site and selling all

export to the local retailer or customer at is connection point

Scheduled non-market generator

45 MW generating unit using 16 MW locally within its own site Scheduled market generator

50 MW co-generation plant Scheduled market generator

100 MW run of river hydro stations Scheduled market generator

150 MW wind farm with all output sold to the market Semi-scheduled market generator

200 MW brown coal generating unit with a 60% minimum load capability Scheduled market generator

2000 MW power station connected to a transmission system Scheduled market generator

2.3 Loss Factors

If a generating system is to be connected to the distribution network, at the time of making the connection inquiry, you should request that the relevant network service provider calculate the distribution loss factor that will apply to your generating system. If it is to be connected to the transmission network, you should request AEMO to calculate the transmission loss factor that will apply.



2.4 Scheduling

A scheduled generator and a semi-scheduled generator must participate in the central dispatch process managed by AEMO while a non-scheduled generator is not required to participate.

A generator that is required to be a scheduled generator or a semi-scheduled generator may seek an exemption from classification as a scheduled generator (see Section 4 of this Guide for AEMOs policy on classification of non-scheduled generating units). AEMO will only approve classification of a generating system that has a total nameplate rating of 30 MW or greater as a non-scheduled generator if it is satisfied that conditions under clause 2.2.3(b) of the Rules have been met.

Under special conditions, non-scheduled generators may have to respond to scheduling requirements. See Section 5 for more information.

2.5 Fuel source and technology type

The fuel source and technology of all generating units must be submitted in the registration

application. Section 8 provides a list of the available categories.



3 GUIDELINE ON EXEMPTION FROM

REGISTRATION AS A GENERATOR

3.1 Purpose

This Guideline on Exemption from Registration as a Generator (Guideline) sets out the factors that AEMO will take into account when considering applications to exempt persons from the requirement to register as generators in the NEM.

3.2 AEMOs power to make this guideline

Under clause 2.2.1(c) of the Rules:

AEMO1 may, in accordance with guidelines issued from time to time by AEMO,

exempt a person or class of persons from the requirement to register as a generator,

subject to such conditions as AEMO deems appropriate, where (in AEMOs opinion) an

exemption is not inconsistent with the national electricity objective.

Note:

A person who is exempt from registration as a generator, may register with AEMO as a

small generation aggregator under rule 2.3A.

The national electricity objective is set out in section 7 of the National Electricity Law (NEL), which states:

The objective of this Law is to promote efficient investment in, and efficient use of,

electricity services for the long term interests of consumers of electricity with respect to

1) price, quality, safety, reliability and security of supply of electricity; and

2) the reliability, safety and security of the national electricity system.

AEMO has issued this Guideline to detail the circumstances where a person might not be required to register as a generator.

1 Italicised terms are defined in the Rules.



3.3 Exemptions generally

The NEL requires a person engaging in generation in the NEM to register as a generator. Exemption from this requirement can be obtained through a derogation, or otherwise under an exemption from AEMO. This may be a standing exemption or a specific exemption granted on application to AEMO. This does not preclude a potential generator who is eligible for exemption (but wishes to participate in the market) from applying for registration.

Exemption means that persons who own the generating system to which the exemption relates, are not required to pay participant fees and do not have to be scheduled or settled in the market.

The Rules distinguish between:

generating systems with a nameplate rating of 30 MW or above that are required to be

classified as scheduled generating units or semi-scheduled generating units in order to

participate in central dispatch; and

smaller generating systems (classified as non-scheduled) that are not so classified

and do not participate in central dispatch.

AEMO considers that this division reflects the likely impact of generating units on the NEM and is more likely to exempt persons from registering as generators where their generating units have nameplate ratings below 30 MW.

3.3.1 Compliance with technical requirements of Chapter 5 of the Rules

You must confirm that your facility is either exempted from the technical requirements of Chapter 5 of the Rules or will be able to meet or exceed its performance standards.

Generators seeking an exemption from providing information to confirm compliance with

technical requirements of Chapter 5 of the Rules, must provide:

evidence to support that they are eligible for exemption from registration for the

generating system; and

a letter from their network service provider stating that the generator is intended for

use in a manner the network service provider considers is unlikely to cause a material

degradation in the quality of supply to other Network Users (see clause S5.2.1(b) of

the Rules).

3.4 Multiple functions and parties

Clause 2.9.3 of the Rules provides that a person ordinarily required to register as a generator may apply to AEMO for an exemption where it notifies AEMO of an intermediary to be registered instead.

AEMO must allow the exemption where:

the intermediary consents to act as intermediary, in a form reasonably acceptable to AEMO; and



the applicant establishes to AEMOs reasonable satisfaction that, from a technical perspective, the intermediary can be treated, for the purposes of the Rules, as the applicant with respect to the relevant generating system.

In order to establish that the intermediary can be treated as the applicant, AEMO requires that the intermediary apply for registration using AEMOs Application for Registration as a Generator.

In addition, each party seeking an exemption is to provide relevant evidence in relation to the technical perspective referred to above, which may include confirmation of a connection agreement, joint venture agreement or related information.

Where a generating system involves multiple parties in ownership, control and operator roles, one of them can be appointed as an intermediary, and the remaining parties can apply for exemption from registration under clause 2.9.3 of the Rules. Each exemption application, using the Application for Exemption from Registration as a Generator, is to be submitted with the intermediarys Application for Registration as a Generator.

Where the ownership of generating units in a generating system is split, that is, different parties might own, control, or operate different generating units, each party must be registered separately in respect of the activities they carry out, or seek an exemption, as appropriate.

3.4.1 Revoking an Intermediary

The exempted person (owner, operator, or controller) may revoke the appointment of the intermediary by giving notice of revocation to AEMO, which under clause 2.9.3 of the Rules will take effect at 4.30 am, two-business days after AEMO receives the notice of revocation.

From this effective date, the intermediarys appointment is revoked, and the exemption granted by AEMO to the exempted party also ceases. However before revoking an intermediary, ensure that your registration application will be effective from the date of revocation; or that you have appointed a replacement intermediary from that date.

Contact AEMO Information and Support Hub ([email protected]) or call 1300 236 600 for more information.

3.5 Settling on market where an applicant would otherwise be

exempt

Regardless of the size of a generating unit, any person, who wishes to receive payment for electricity generated by their generating unit through the NEM, then that person may apply to AEMO for registration as a market generator and its generating unit must be classified as a market generating unit.

In the case of a market small generation aggregator, if the generating unit has a nameplate

rating below 30MW and is covered by an exemption from the requirement to register as a

generator, the market SGA may classify the generating unit as a market small generating unit.



3.6 Standing exemption for generating systems with nameplate

rating of less than 5 MW

Small generating facilities tend to have a nameplate rating of less than 5 MW and so cannot significantly affect market outcomes or impact power system security, for example:

Emergency back-up generation

Small solar system

Minor hydro power stations

Small generating facilities entirely contained in an owners process

Generating systems on isolated networks

Therefore, AEMO has decided that a person who engages in the activity of owning, controlling, or operating a generating system that satisfies any of the following conditions, is automatically exempt from the requirement to register as a generator in relation to that activity where both (a) and (b) apply:

(a) one of the following applies:

(i) the generating system has a total nameplate rating at a connection point of

less than 5 MW; or

(ii) the generating system is not capable of exporting to a transmission system or

distribution system in excess of 5 MW; or

(iii) the generating system has no capability to synchronise or to operate

electrically connected to a distribution system or transmission system;

and

(b) either:

(i) the sent out generation of the generating unit is purchased in its entirety by the

local retailer or by a customer located at the same connection point; or

(ii) each of the generating units comprising the generating system is classified as a

market generating unit by a market small generation aggregator.

If you are in doubt as to whether your generating system can meet any of these criteria, you may submit an Application for Exemption from Registration as a Generator for AEMOs consideration.



3.7 Application for exemption for generating units or generating

systems with a nameplate rating of less than 5 MW

There will be circumstances where a generating system might not be eligible for exemption in accordance with the standing exemption referred to in section 0. Additionally, an applicant might wish to be exempted from the requirement to register in respect of a generating unit only.

A person may apply to AEMO for exemption from registration if the nameplate rating of their generating system or generating unit is less than 5MW and if they are not eligible for exemption under the standing exemption referred to in section 0 of this Guideline.

AEMO will consider the application and may grant the exemption in its absolute discretion and based on any conditions it considers appropriate.

3.8 Application for exemption requirement for generating

systems with a nameplate rating of more than 5 MW but less

than 30 MW

A person may apply to AEMO for exemption from registration if the nameplate rating of their generating system is between 5 MW and 30 MW, and either:

the generating system exports less than 20GWh in any 12-month period, or

there are extenuating circumstances.

AEMO will consider such an application in exceptional circumstances only, and may grant the exemption in its absolute discretion and based on any conditions it considers appropriate.

3.9 Application for exemption for generating systems with a

nameplate rating more than 30 MW

A person may also apply to AEMO for exemption from registration if the nameplate rating of their generating system is more than 30 MW.

AEMO will consider such an application in exceptional circumstances only, and may grant the exemption in its absolute discretion and based on any conditions it considers appropriate. At the very least, AEMO will need to be satisfied that the generating system will not have a material negative impact on the operation of the NEM or the activities of market participants in the NEM.



4 AEMOS POLICY ON REGISTRATION AS A NON-

MARKET GENERATOR

4.1 Introduction

Clause 2.2.5(a) of the Rules sets out the conditions under which a generating unit is classified as a non-market generating unit. This information is intended to be a guide only. Each application for registration will be determined based on the relevant facts and circumstances. Clause 2.2.5 (a) reads as follows:

A generating unit whose sent-out generation is purchased in its entirety by the local

retailer or by a customer located at the same connection point must be classified as a

non-market generating unit.

4.2 Policy

There are two aspects to the phrase purchased in its entirety that must normally be demonstrated to AEMO for a generating unit to qualify as a non-market generating unit:

The first is that the local retailer or customer has an agreement to purchase all sent

out generation and the applicant demonstrates to AEMO by providing either a copy of

the agreement or a statutory declaration that there is such an agreement in place.

The second is that the local retailer or customer demonstrates to AEMO that its load

exceeds the output of the generating unit at all times under normal conditions.

For a customer, there would normally be sufficient load at the connection point of the generating unit such that there is no export of electricity at the connection point under normal conditions.

The local retailer must be able to demonstrate that the total of its local load exceeds the output of the generating unit under normal conditions.

If the location of the generating unit is such that it causes some export to the transmission system at a nearby transmission connection point, the generating unit may still be classified as a non-market generating unit provided the total local load is sufficient.

If a local retailer has more than one generating unit connected within its local area, the sum of the output of the non-market generating units must not exceed the local load. If the sum of the generating units output exceeds the local load under normal conditions, the local retailer must nominate which generating units are to be registered as non-market. The remaining generating units must be registered as market generators.

AEMO considers that any electricity from the generating unit that flows to the network has been delivered to the market and therefore the customer cannot claim that it has purchased the electricity in its entirety. There must be a net purchase by the customer at that connection point at all times under normal conditions.



4.3 Meaning of normal conditions

Normal conditions means periods of operation without load shedding or other abnormal events that would cause a reduction in the expected demand. This is intended to cover an unexpected event that causes the local retailers local load or the customers load to fall below the output of the generating system. AEMO can tolerate exports of electricity to the network under these infrequent and unusual circumstances without requiring the generator to be registered as a market generator.

There would need to be arrangements between the local retailer and either the generator or the customer as to how they would account for any export under conditions other than normal conditions.

4.4 Purchase by both customer and local retailer

Clause 2.2.5(a) of the Rules states that the sent out generation must be purchased in its entirety by either the local retailer or a customer. In the case of a generating unit that supplies a customer at the same connection point and is able to demonstrate that the electricity exported to the market at the connection point is purchased in its entirety by the local retailer, the generating unit may qualify as a non-market generator.

4.5 Meaning of at the same connection point

For a local retailer, the generating units to be registered must be connected within the local area of that local retailer.

With respect to a customer, at the same connection point means that the load and the generating unit effectively need to be connected in such a way that the metering installation for the common connection point registers the net energy flow of the customer load and the generator output. Transmission or distribution network equipment cannot be used to connect the generating unit to the customers load.



5 AEMOS POLICY ON CLASSIFICATION OF

GENERATING UNITS AS NON-SCHEDULED

GENERATING UNITS

5.1 Introduction

A generating unit with a nameplate rating of 30 MW or more, or that is part of a group of generating units connected at a common connection point with a combined nameplate rating of 30 MW or more, may be classified as a scheduled generating unit or a semi-scheduled generating unit unless AEMO approves (under clause 2.2.3(b) of the Rules) that the generating unit be classified as a non-scheduled generating unit.

Clause 2.2.3(b) of the Rules states:

A person must not classify a generating unit as a non-scheduled generating unit unless it has

obtained the approval of AEMO to do so. AEMO must approve the classification if it is satisfied

that:

1) the primary purpose for which the relevant generating unit operates is local use and the aggregate sent out generation at its connection point rarely, if ever, exceeds 30 MW; or

2) the physical and technical attributes of the relevant generating unit are such that it is not practicable for it to participate in central dispatch.

5.2 The Policy

AEMO will consider each application on its merits, and this Policy sets out the criteria that AEMO will use to evaluate an application for classification as a non-scheduled generating unit. This Policy assumes that the relevant generating unit is not eligible for exemption from registration.

AEMO applies clause 2.2.3(b) as follows:

With respect to sub-clause (1):

AEMO considers the primary purpose to be local use if more than 50% of the capacity of the generating unit or energy supplied from it (gross generation less generation auxiliary load) is used locally. Note that, in any case, the sent out generation must rarely, if ever, exceed 30 MW.

With respect to sub-clause (2):



AEMO would need to examine, in each case, the physical and technical attributes of the relevant generating unit. AEMO considers that the physical and technical attributes that make it impractical to participate in central dispatch are:

o the fuel or energy source for generation is dependent on some other industrial

process not related to electricity production; or

o the generating unit is unable to vary output in response to a dispatch instruction for

some technical reason (other than fuel supply constraints).

5.3 Conditional approval

Clause 2.2.3(c) of the Rules states:

If, in relation to an application under paragraph (b), in AEMOs opinion it is necessary for any

reason (including power system security) for the relevant generator to comply with some of the

obligations of a scheduled generator or semi-scheduled generator for that generating unit,

AEMO may approve the classification on such terms and conditions as AEMO considers

reasonably necessary.

The terms and conditions of a classification of a scheduled generator that AEMO may consider necessary include, but are not limited to:

Provision of ST PASA information (such as expected plant availability and PASA

availability) similar to that contemplated in clause 3.7.3(e).

Provision of MT PASA information (such as expected plant availability) similar to that

contemplated in clause 3.7.2(d).

Submission of dispatch information (such as expected MW capability) similar to that

contemplated in clause 3.8.2.

Compliance with dispatch instructions similar to that contemplated in clauses 4.9.2(b),

4.9.2(c) and 4.9.4(b) on reactive power dispatch.

The terms and conditions of classification of a semi-scheduled generator that AEMO may consider necessary include, but are not limited to:

Provision of an energy conversion model similar to that contemplated in clause

2.2.7(c) (2).

Classification of two or more generating units as one semi-scheduled generating unit

similar to that contemplated by clause 2.2.7(i).

Compliance with dispatch instructions similar to that contemplated in clauses 4.9.2(b), 4.9.2(c)

and 4.9.4(b) on reactive power dispatch.



6 AEMO'S POLICY ON CLASSIFICATION OF A

GENERATING UNIT AS A SEMI-SCHEDULED

GENERATING UNIT

6.1 Introduction

A generating unit with a nameplate rating of 30 MW or more, or one that is part of a group of generating units connected at a common connection point with a combined nameplate rating of 30 MW or more, will be classified as a semi-scheduled generating unit where the output of the generating unit is intermittent unless AEMO approves its classification as a scheduled generating unit or a non-scheduled generating unit.

6.2 Policy

Intermittent is defined in Chapter 10 of the Rules:

A description of a generating unit whose output is not readily predictable, including, without

limitation, solar generators, wave turbine generators, wind turbine generators and hydro-

generators without any material storage capability.

AEMO will consider any alternative forms of intermittent generation as they are developed. In considering alternative forms of generation, AEMO's consideration may include, but will not be limited to:

Whether the output of the generating unit is unpredictable and any measures of

"unpredictability" you suggest.

The nature of the active energy input to the generating unit.

The timeframe of the variability of the output of the generating unit (taking into account

the 5-minute dispatch cycle).

Whether the generating unit can decrease output in response to a dispatch instruction.



7 AEMOS POLICY ON GENERATORS

REGISTERING AS CUSTOMERS

7.1 Policy

AEMOs policy is:

A market generator may purchase electricity through the market provided both of the following requirements are satisfied:

The electricity purchased is for operating the relevant generating system.

The generator only purchases the electricity from the market through the connection

point for a market generating unit. Where multiple connection points are involved, the

generator and the relevant network service provider must agree that the relevant

connection points pertain to the agreed point of supply between the network service

provider and the market generating unit.

This is based on clause 2.2.4(b) of the Rules, which implies that purchases under clause 2.2.4(d) relate to the activity of a market generating unit.

7.2 Examples of the application of the policy

There is a range of situations in which a generator consumes electricity. These are outlined in the following diagrams and cover the following situations:

7.2.1 Single point of connection to the network

Figure 1: single point of connection to the network

Market

generating

unitAuxiliary Supply

Substation busbar

TNSP ASSETS



In this situation, the generator is taking its auxiliary supply before the transmission system. Consumption through this connection point would only be likely when the generating unit is out of service. In this case, the generator is not required to register as a customer. All purchases under this situation would be covered by clause 2.2.4(d) of the Rules.

7.3 Multiple points of connection to the network

7.3.1 Local Connection

Figure 2: local connection

7.3.2 Remote Connection

Figure 3: remote connection

Market

generating

unit

Auxiliary supply

TNSP ASSETS

Substation busbar

Market

generatin

g unit

TNSP ASSETS

NETWORK

Auxiliary supply

Substation A busbar

Substation B busbar



7.3.3 Local and Remote Connection

Figure 4: local and remote connection

In cases 7.3.1, 7.3.2, and 7.3.3, auxiliary supply for the market generating unit is taken from physically separated connection points, either at the same substation, or from another point in the network, or a combination of local and remote points.

As referred to in the Rules, a connection point can refer to multiple physical points. The connection point is defined in Chapter 10 of the Rules as:

The agreed point of supply established between network service provider(s) and another

registered participant, non-registered customer or franchise customer.

Where the generator requires multiple points for a market generating unit, they must agree with the network service provider that these points are the agreed points of supply. AEMO will require written confirmation from both parties that such an agreement is reached.

In cases 7.3.1, 7.3.2, and 7.3.3, AEMO requires the generator to register as a customer and classify the connection points that consume electricity as a market load unless:

The generator and the relevant network service provider confirm that all relevant

points are the agreed connection points for the market generating unit.

The electricity consumed through these additional connection points is within the

activity of operating the relevant generating system.

The consumption of electricity encompassed within the activity of operating a generating system would be expected to cover such facilities as on-site offices, mines owned by the generator, water pumping, conveyor belts and power station auxiliaries.

Market

generating

unit

Market

generating

unit

Auxiliary supply

Auxiliary supply

Auxiliary supply Auxiliary Supply

NETWORK

Substation A busbar

Substation B busbar

TNSP

ASSETS



7.4 Pump storage schemes

7.4.1 Single Point of Connection

Figure 5: single point of connection

Where the market generating unit and pumping loads are connected at the one physical connection point, the generator is not required to register as a customer and the electricity consumed for pumping is deemed to be purchased under clause 2.2.4(d).

7.4.2 Multiple Points of Connection

Figure 6: multiple points of connection

Market

generating

unit

TNSP ASSETS

Pump

Market

Generating

unit

TNSP ASSETS

NETWORK

Pump

Substation A busbar

Substation B busbar



Where the electricity consumed in pumping is at a separate connection point, whether locally or remote, the generator and the relevant network service provider will need to confirm that the relevant points are the agreed connection points for the market generating unit. If such agreement has been obtained, the generator does not need to register as a customer for the pumping connection point.

7.5 Customer load other than that used in an activity associated

with the relevant generating system

7.5.1 Load within works - single connection point

Figure 7: single connection point

Where a customer has a substantial market generating unit within its works, in addition to load not associated with the generation system via a single connection point, it is likely that the generator will be required to register as a generator and a customer. There is a range of possible scenarios from this configuration depending on whether the load is to be a market load, second or first tier or a franchised load. Other variables relate to whether the generator is to be market generator or non-market generator and whether it is connected to the transmission system or embedded within a distribution system.

LOAD Market

generating unit

TNSP ASSETS Substation busbar



7.5.2 Retail Supply

Figure 8: retail supply

Where a generator also has an associated retail activity, it will be required to register as a customer and classify all connection points related to its retail activities as market loads.

Clause 9.12.3 applies to the NSW Power Traders.

7.6 Impact of Connection Point Classification

Classification of a connection point as a market load or market generating unit connection point has direct impact on:

prudential requirements

participant fees

jurisdictional charges

ancillary service payments

Transmission Use of System Charges (TUOS)

jurisdiction contestability levels

intervention and reserve trader arrangements

administered price cap compensation.

A customer is taken to be a market customer only where its activities relate to any market load, and a generator is taken to be a market generator only where its activities relate to any market generating unit.

The policy of requiring certain loads to be classified as a market load or a market generating unit is primarily concerned with AEMOs reasonable assessment of the purpose for the existence of those loads.

Network

Market

Generator Unit

Load



7.6.1 Prudential requirements

AEMOs prudential policies only examine the net position of a market participant and thus the classification of market load to a generator whose predominant activity is generation may not require the generator to provide a prudential guarantee.

Where a generator is a predominant consumer, the net position will take the generation into account. If a generator records a net import in a billing period, there may be a review of its prudential requirements.

Only those market generators with a net settlement liability to AEMO will attract a positive maximum credit limit. This is completely independent of the classification of the registered participants connection points.

7.6.2 Participant fees

A generator that has a load that is classified as a market load (for example, where the consumer is a person who is, or could be, registered as a second-tier customer), will be charged relevant participant fees.

7.6.3 Jurisdictional charges

Any jurisdictional charge for a market load (settled by AEMO) will not be applied to loads at a market generating unit connection point. Any jurisdictional charges that apply to market customers would be expected to be levied against the market load of a generator or customer.

7.6.4 TUOS

TUOS charges are approved by the Australian Energy Regulator.

7.6.5 Jurisdictional contestability levels

Clause 2.3.1(e) of the Rules requires that a connection point must satisfy the requirements of participating jurisdictions before it can be classified as a load. Therefore, it is appropriate that where a generator is required to register as a customer and classify any connection points as a market load, evidence is provided of their satisfaction of jurisdictional requirements. One jurisdictional requirement is that contestability limits be met. A generator with loads classified as a market generating unit connection point is not required to demonstrate to AEMO that the load meets contestability limits.

7.6.6 Intervention and reserve contract

In the case of intervention and reserve contracts, payments will be made to generators and charges made to market customers in respect of those connection points classified as market generating units or market loads, respectively.

7.6.7 Administered price cap compensation (clause 3.14 of the Rules)

Administered price cap compensation is funded by all market customers in proportion to the amount of the metered market load. Generators will not pay with respect to loads classified as market generator connection points.



8 FUEL SOURCE AND TECHNOLOGY TYPE

8.1 Introduction

To allow publishing of this information, the fuel source and technology of all generating units must be submitted in the registration application. A list of common fuel source and technology types is provided in this section.

8.1.1 Fuel source types

Table 2: common fuel source types

Primary Fuel Source Descriptor

Renewable/Biomass/Waste Bagasse

Biodiesel

Biofuel - other

Biogas - other (captured for combustion (not methane))

Biogas - Sludge (captured for combustion (methane only))

Biomass recycled municipal and industrial materials

Dry wood

Ethanol

Green and air dried wood

Landfill methane / Landfill gas

Fossil Black coal

Blast furnace gas

Brown coal

Brown coal briquettes

Charcoal

Coal seam methane

Coal tailings

Coke oven coke

Coke oven gas

Crude oil and condensates

Diesel

Ethane

Fuel Oil

Gaseous fossil fuels - other

Gasoline (aviation fuel used for stationary energy) - avgas

Gasoline (non-aviation fuel)



Heating oil

Kerosene (aviation fuel used for stationary energy) avtur

Kerosene (non-aviation fuel)

Liquefied aromatic hydrocarbons

Liquefied petroleum gas

Naphtha

Natural gas compressed

Natural gas liquefied

Natural gas unprocessed

Natural gas (pipeline)

Natural gas/diesel

Natural gas/fuel oil

Natural gas liquids other

Petroleum based greases

Petroleum based oils and lubricants

Petroleum based products other

Petroleum coke

Recycled fossil fuel derived industrial and municipal materials

Refinery coke

Refinery gas and liquids

Solid fossil fuels other

Solvents if mineral turpentine or white spirits

Sulphites lyes

Tar

Town gas

Waste coal mine gas

Hydro Water

Geothermal Geological heat

Solar Solar

Wave Water

Wind Wind

Tidal Water



8.1.2 Technology types

Table 3: common technology types

Primary Technology Descriptor

Renewable Hydro - Gravity

Run of River

Pump Storage

Tidal

Wave

Wind - Offshore

Wind - Onshore

Photovoltaic Flat panel

Photovoltaic Concentrator

Photovoltaic Tracking Flat panel

Photovoltaic Tracking Concentrator

Solar Thermal

Boosted Solar Thermal

Solar Thermal with Storage

Boosted Solar Thermal with storage

Enhanced Geothermal Systems (Hot Dry Rock)/Flash

Combustion Compression Reciprocating Engine

Spark Ignition Reciprocating Engine

Combined Cycle Gas Turbine (CCGT)

Open Cycle Gas turbines (OCGT)

IDGCC (Integrated Drying and Gasification Combined Cycle)

IGCC (Integrated Gasification Combined Cycle)

Integrated CTL (Coal to Liquid)

Steam Sub Critical

Steam Super Critical

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AEMO January 2014 Page 30

Documents

Generator Classification and Exemptions Guide Final (1)