AGL has responded to the Australian Energy Market Commission (AEMC) Primary frequency response (PFR) incentive arrangements draft rule determination. AGL does not support the decision to make PFR permanent because under mandatory PFR instead of sourcing PFR from the units that can most efficiently provide it, those that cannot provide it efficiently will be forced to provide some, which will displace the provision by the efficient providers. The submission suggests that the AEMC instead implement an effective PFR incentive mechanism which drives PFR provision by market forces and has the capability to specify minimum regional quantities to ensure the Australian Energy Market Operator has confidence that adequate PFR is being provided. The submission also suggests that further consultation will be necessary to complete the design of an effective mechanism. If these suggestions are not possible, we have suggested the AEMC make a final determination to extend the mandatory PFR sunset date to June 2025.
