Expressions of Interest and Tender for NCESS – Reliability Services 2025-27 (WA)

The Coordinator of Energy has determined, under clause 3.11A.4 of the Wholesale Electricity Market (WEM) Rules, to trigger, at the request of the Australian Energy Market Operator (AEMO), a Non-Co-optimised Essential System Services (NCESS) procurement process for Reliability Services to commence on 1 October 2025 with a two-year duration.

The NCESS Trigger Submission is based on AEMO’s analysis that emerging facility availability issues are a risk to Power System Security and the effectiveness of the Reserve Capacity Mechanism (RCM) to mitigate capacity shortfalls. AEMO considers that forecast capacity to meet the 2025-26 Reserve Capacity Requirement presents a significant risk to Power System Security, which will not be fully addressed by the Reserve Capacity Mechanism (RCM) for the 2025-26 Capacity Year. As such, AEMO considers that the existing mechanisms under the WEM Rules may not be sufficient to address the identified risks. The NCESS procurement was initiated ahead of completion of the 2024 Reserve Capacity Cycle to allow sufficient time for proponents to deliver capacity.

This procurement follows AEMO’s 2023 WEM ESOO, which presented an outlook of supply-demand indicating an urgent need for investment by capacity providers to supply the SWIS to meet the WEM reliability standard.

Outcome

AEMO has entered NCESS Contracts with five Service Providers for ten projects to provide up to 405 MW of Peak Demand Service and against a procurement target of 436 MW.

As required by clause 3.11B.15 of the WEM Rules, AEMO must publish details regarding each NCESS Contract on the WEM Website.
The services provided under each NCESS Contract are from 1 October 2025 until 1 October 2027 for:

• the Peak Demand Service, increase Injection during the Electric Storage Resource Obligation Intervals; and

The payment structure for each NCESS Contract is:

• for a Registered Facility and Unregistered Equipment – an availability payment (in ($/MW/per annum) for making the service available (which is not payable unless and until the NCESS provider satisfies the conditions precedent); and
•  for Unregistered Equipment – an activation payment (in ($/MWh).

The required details to be published for each NCESS Contract are indicated in the tables below.

Call for NCESS Submissions

AEMO published the Call for NCESS Submissions on the VendorPanel seeking submissions from providers with the capability to increase Injection or decrease Withdrawal at time of supply shortfall in the South West Interconnected System. This procurement process was for the expected utilisation of up to 436 MW of Reliability Services during the 2025-2027 Capacity Years. Given the size of the identified risks, AEMO will required that each service be operationally dispatchable and will therefore set a minimum service size of 1 MW.

AEMO considered services may be delivered by either new Registered Facilities through offer obligations for Injection or Withdrawal in the appropriate Dispatch Intervals, or by unregistered generation or load equipment activated through alternative methods.

AEMO would like to thank stakeholders who responded to the Expressions of Interest with feedback to the draft Service Specifications which helped us to understand any economic or technical benefits associated with a different contract duration or a change to the commencement date.

Based on a requirement of 354 MW, AEMO received submissions in the order of 1 GW. Of these, several submissions would not maximise value for money to consumers.

Key changes to the NCESS Service Specification following the Expressions of Interest include:

• An increase of the Service Quantity from 354 MW to 436 MW.
• A modified treatment of Intermittent Generating Systems (e.g., solar photovoltaics or wind) to more clearly specify parameters for participation.
• An ability to offer either a one-year or two-year contract duration.

Submissions must be provided via the VendorPanel in accordance with the Call for Submissions Form by 5.00pm AWST on Wednesday 24 January 2024.

Interested stakeholders should register with VendorPanel to be informed of whether any supporting documentation such as clarifications to questions may have been published.

Queries may be submitted by email to WA.FutureSystemDesign@aemo.com.au.