What is IESS, and why is it relevant to NEMreview?

On this page we provide some context to the looming IESS Market Changes (the bulk of which are scheduled to go live in the market from Monday 3rd June 2024).

 

Background to IESS

Back on 2nd December 2021, the AEMC made a Final Rule for the Integrating Energy Storage Systems into the NEM.

(a)  you can find more detail about the AEMC processes on the AEMC website at their rule change sub-site for ERC0280 (their project ID)

(b)  note that in May 2023 the AEMC modified this original rule … you can find more detail about the AEMC processes on the AEMC website at their rule change sub-site for ERC0351 (their project ID)

Following the Rule Change process at the AEMC, the AEMO established its own processes for the implementation of the AEMC’s rule change.

…  you can find more detail about the AEMO implementation process on their Major Programs sub-site here.

Relevant to this rule change are a few key dates, including the following:

9th August 2023 = Aggregated Dispatch Conformance went live, as an option for Registered Participants.

Wednesday 10th April 2024 = the AEMO’s EMMS Data Model v5.3 went into production (i.e. with changes that facilitate BDUs and IRPs)

Monday 3rd June 2024 = IESS goes live.

On our WattClarity® market commentary site, you’ll find an expanding collection of articles pertaining to IESS collated in this ‘Market Reform’ sub-category.

… after the rule change has gone live, we will endeavour to provide some updates as to the level of market participation this has stimulated, and the results.  Where time permits, these new articles will be aggregated in that category, so you might like to subscribe there, if not already.

 

Where this is relevant to Market Analysts using NEMreview

Our NEMreview product serves the needs of a range of market analysts:

  • Who are typically not working within direct wholesale market participants…
    • As such, our clients may not even be aware of the existence of AEMO’s EMMS,
    • And are unlikely to understand specific permutations of detailed implementation of the market rules.
  • Rather, our NEMreview clients work in organisations that might be described as ‘outside the (wholesale) market, looking in’.  Such organisations include:
    • Government Departments and other Bodies;
    • Consultants and other Service Providers;
    • Equipment suppliers;
    • Investors and Investment Banks;
    • Large Energy Users, and their representatives (e.g. Retail Brokers);
    • and others

In this sense, or NEMreview clients don’t have the time to invest in understanding all the complexities of the AEMO’s EMMS Market Data structure … especially with these complexities increasing further with the implementation of IESS.

These NEMreview clients just want quick/clear access to a core set of market data, from both the physical market (operated by AEMO) along with the financial market (operated by ASX Energy), plus other related data (such as weather data).

 

IESS increases Market Complexity

Unfortunately (in our view) some specifics of the IESS Rule Change (and implementation of it) makes the market more complex for analysts who are seeking to directly run their own queries in the AEMO EMMS database.  This complexity increases the risk that an analyst might make analytical errors in their queries, unless very thoughtful about all the corner cases the IESS changes impose.

This complexity is something we’re seeking to reduce/remove for our NEMreview clients … indeed is a stimulus to prompt us to try to declutter/simplify NEMreview as noted here (i.e. beyond just IESS-related market changes).

 

Three different types of Facilities (i.e. collections of DUIDs)

As at April 2024, our understanding of how this rule change will be implemented is that there will effectively be several different types of units.  In this note we specifically highlight three types of facilities (though there are others):

Facility Type #1 = batteries

As part of this Rule Change, it is expected* that all batteries will migrate:

1)   from having two DUIDs to represent a unit (i.e. one DUID-G1 unit to represent injections to the grid and one DUID-L1 to represent withdrawals from the grid).
2)  to having just a single DUID-NEW, which

* though there’s some uncertainty about this (for instance, about when these transitions will occur) … so we will be watching what unfolds for all existing batteries in the NEM, and any that are registered after this change.

Indeed, from constraint equations we see at April 2024, we suspect the transition will be as follows:

A key point here is that trending battery discharges over time (including ‘before IESS’ and ‘after IESS’ dates) will require selecting two different DUIDs.

Facility Type #2 = other storage units, like pumped storage hydro

However as part of this Rule Change, it is expected* that pre-existing pumped storage hydro stations (and new ones like Kidston) will continue registering as two separate DUIDs (i.e. in the same way as battery units have … up until IESS).

Facility Type #3 = hybrid units

It is likely that it won’t be some time until after the ‘go live date’ (i.e. after 3rd June 2024) that we see the first hybrid units registered into the NEM.  The rules seem to prescribe several different options by which this might be effected.

… so suffice to say we will be watching these developments closely.

 

Number sign on Discharging/Charging becomes more confusing

Coupled with the above, the changes implemented by the AEMO will now mean that the number sign (i.e. when a data point is positive or negative in the EMMS) will mean different things depending on the data point one is looking at.

without the changes we’ve made in April 2024, this would mean that one unit’s Target might be positive if charging/consuming, whereas another unit’s Target would be negative if charging/consuming … with increasing complexity coming with respect to specific configuration of units.

So within NEMreview we’re attempting to make comparisons simpler, including longitudinally (e.g. if trending data back to times back before IESS went live) such that all data operates by a simple rule:

Positive numbers = represent injections onto the grid (i.e. discharge from a battery, generation from hydro, coal, gas, wind, solar, etc…).

… remembering Tripwire #3 (introduced with WDRM), this will continue to mean that dispatch of Negawatts will be seen as a positive number (i.e. a supply-side quantity, even if intangible).

Negative numbers = represent withdrawals from the grid (i.e. charging a battery, pumping uphill to a pumped storage reservoir, and consumption by other Scheduled Loads).