Reform: Territory Electricity Market

The Northern Territory (NT) Government is implementing significant reforms in the wholesale electricity market to support an orderly and efficient transition to renewable energy. The reforms aim to ensure that electricity remains affordable, secure, and reliable as the electricity sector progresses towards the NT Government’s target of 50% renewable energy by 2030.

Reform overview

The reforms will see a new Territory Electricity Market (TEM) established with unique arrangements for wholesale electricity supply in the 3 regulated electricity systems - the Darwin-Katherine electricity system (DKES), Alice Springs (AS) and Tennant Creek (TC) electricity systems.

The TEM is designed to create a centralised approach within each power system for determining and procuring generation resources at lowest cost while ensuring system security and reliability requirements are not compromised.

Central to the new market design for the DKES will be what is termed as a 'public procurement model'. This market design will centralise the planning and procurement of wholesale electricity services within the DKES, coordinating generation investment and connection through a centralised process.

The public procurement model provides the most effective way for meeting the NT Government's vision for improved renewable energy integration that ensures a secure, reliable and affordable energy future.

The NT Government has also decided to adopt a sole supplier arrangement for the AS and TC electricity systems.

Under this arrangement, Territory Generation will be established as the sole supplier and mandated to efficiently integrate greater levels of renewable energy in these power systems under appropriate regulatory oversight.

Implementation of the public procurement model in DKES and sole supplier arrangements in AS and TC electricity systems will require supporting governance arrangements to establish and clarify the roles and responsibilities of different entities required for the TEM. These include:

• Separating System Control and Market Operator (NTESMO) from Power and Water Corporation into an independent entity to undertake system operations and real time dispatch, central planning and procurement activities, and market settlement functions in line with the new role for NTESMO in the TEM.
• Establishing a new set of NT electricity system and market rules (market rules) that will consolidate the operations of the system and market into a single set of rules for the TEM.
• The Department of Mining and Energy (DME) being formally tasked with coordinating policy and market development through administering the market rules.
• Providing the Utilities Commission with appropriate regulatory oversight role for maintaining sole supplier arrangements in Alice Springs and Tennant Creek power systems.

Further details of the TEM arrangements and the reform implementation schedule is provided in the TEM overview paper that can be accessed below.

Electricity Market Reform Implementation Taskforce

The NT Government has established the Electricity Market Reform Implementation Taskforce (EMRIT) to oversee the implementation of the TEM. EMRIT is chaired by the chief executive officer of the DME, and membership comprises the under treasurer and an independent electricity sector expert.

EMRIT reports to directly to the minister responsible for renewables who maintains decision-making oversight and strategic direction for the reform. EMRIT is supported by a dedicated team of experts within the DME.

Industry reference group

EMRIT recognises the importance of stakeholder engagement in undertaking its role. To enable effective ongoing engagement and input from industry during the implementation phase, an industry reference group has been established. This group will play an important role in providing strategic input and expertise throughout the implementation process.

The industry reference group comprises senior representatives of the following key stakeholders:

• Power and Water Corporation in its capacity as the network operator and system controller/market operator
• Territory Generation
• Jacana Energy
• private sector generators and retailers operating in the NT regulated electricity systems
• select large customer representatives
• prospective major participants
• union representatives from Community and Public Sector Union and Electrical Trades Union
• the Utilities Commission (observer).

The industry reference group is governed by a term of reference PDF (138.0 KB).

While stakeholder consultations will principally occur through the industry reference group, specific stakeholders will also be targeted for individual consultation on issues that directly impact them.

Territory Electricity Market overview paper

Information for stakeholders on the TEM.

Get the TEM overview paper PDF (1.2 MB).

The paper provides an overview of:

• the main components of the TEM and the rationale
• indicative implementation schedule, and
• the approach to ongoing stakeholder engagement during the implementation phase.

Contact

Territory Electricity Market Project Team
Electricity Market Reform Implementation Taskforce
Department of Treasury and Finance and Department of Mining and Energy
TerritoryElectricityMarket.DITT@nt.gov.au