Changes to NT’s electricity market finalised, as government says cost of reaching renewables target unknown

Major reforms needed to gear the Northern Territory’s electricity market for more private investors and renewable energy is set to be in place by the end of the year.

MAJOR reforms needed to gear the Northern Territory’s electricity market for more private investors and renewable energy is set to be in place by the end of the year.

But as the department outlines changes that need to be made to the market for the NT to reach its 50 per cent renewables by 2030 target, revelations out of budget estimates show the government doesn’t know how much it needs to spend to hit its goal.

The NT’s “interim” electricity market, a bare bones set up in 2015 following the split of Power and Water Corp into three entities, is due to be “significantly challenged” as more private power generators and investors enter the system.

MORE:

NT electricity system ‘running on luck’ as government fails to plan for the future: Alan Langworthy

Faulty installation during maintenance at Channel Island caused major power outage

NT government signs agreement with Sun Cable to develop largest solar farm in world

To fix the issue, the government announced its electricity market priority reform program, aimed at the Darwin-Katherine Integrated System, in mid-2020 and will release half of the road map on Saturday. This includes its final policy positions on what needs to be done to improve the co-ordination of different generators (dispatch) and how electricity is sold and bought between retailers and generators (settlement).

Channel Island Power Station, a major part of the Darwin Katherine Integrated System. Picture: Che Chorley

Simultaneously, consultation will begin on what changes need to be made to market reliability and essential system services standards, with a position to be finalised by mid-2021.

Some of the reforms outlined for dispatch and settlement include moving away from 30-minute trading intervals to a system that allows best value for money when it comes to choosing which generators to switch on and off, and moving “common points” away from generators and onto two nodes at Channel Island to assist the trading of energy.

Department bureaucrats estimate a majority of the changes can be in place by late 2021.

Meanwhile, the government has revealed through the budget estimates process that it doesn’t actually know how much it needs to spend in the next decade to reach its renewables target, saying it was a “joint effort” with industry and business “driven largely by social licence” and the need to deal with climate concerns.

The government hopes that reforming the market will attract more private investors and competition in the Territory and, in turn, create a scenario where private capital, instead of government funds, will pay for “required infrastructure”.