Big changes to the Australian Energy Market are here – How Gentrack has helped customers prepare for the 5MS regulatory changes
On 28 November 2017, the AEMC made a final rule to change the settlement period for the electricity spot price from thirty minutes to five minutes, with the changes to be implemented by late 2021. Five-minute settlement (5MS) provides a better price signal for investment in fast response technologies, such as batteries, new generation gas peaker plants and demand response and is one of the biggest changes the Australian market has seen since the NEM was formed in the ’90s with the impacts on all those involved in the sector no less wide-ranging.
An Australian C&I Energy supplier needed to meet the regulatory changes for five-minute settlement of interval metered customers and provide high availability, resilience and scalability required of mission-critical billing systems.
One of the largest considerations with moving to five-minute settlement is the increase of data. Withstanding data changes and additional meter data to manage, Gentrack needed to handle the increased data load with around 70 different industry procedures affected and around six times more meter data to manage and store. All this while retaining the accuracy needed in customer billing.
Choosing an accurate, market-compliant software solution that can handle the increased data load and keep the mission-critical meter to cash processes running within the available processing window is crucial in ensuring retailers and energy suppliers can make a smooth transition to five-minute settlement.
Gentrack’s approach to building cloud services to deliver functional components strategically provides value to customers in ever-changing regulatory environments.
The development of Gentrack’s Meter Data Services on AWS predates the industry 5MS regulatory changes, however, the scheduling of the industry program fast-tracked the urgency and implementation of this service to market with the need to process large volumes of interval data as a by-product of the industry-wide changes in Australia.
Gentrack’s Meter Data Services on AWS is a fully managed cloud service that supports the ingestion, analysis, and querying of large volumes of meter data and is designed to be used by multiple systems within the utility’s enterprise including Gentrack’s Billing System.
As an Enterprise system, Gentrack is integrated into other systems to support critical workflows and processes. These workflows also require transformation for 5MS. An integration cloud layer is used for these integration points to other systems.
Gentrack’s Meter Data Services on AWS Cloud provides:
- Efficient Storage of meter data
- Processing of large complex account workloads
- Turning detailed consumption data into actionable insight
The product facilitates low latency access to meter data, aggregates energy usage and gives controlled access to meter data allowing providers, the ability to scale using native cloud services with data while supporting ALL interval-based NUOS calculations in the NEM .
It is designed not just for five-minute interval data, but potentially finer increments, through the ability to scale using native cloud services and uses a microservices architecture with de-coupled data processing which means it is fault-tolerant and can execute many processes concurrently.
Support for 1/4 hourly kVA Demand calculations also eliminates manual processes that have been used previously thereby reducing operational costs.
The performance and scalability needed to meet data increases from 5MS also brings the opportunity to realise some efficiency improvements for retailers.
Moving the customer to Gentrack’s Metered Data Service on AWS to comply with 5MS and Global Settlement regulations eliminated manual processes associated with customers fifteen-minute readings.
There was also a 75% timeframe reduction for processing meter data and associated invoicing cycles allowing the retailer to bill their customers a day ahead of the previous process. This pulls forward significant cash-flow for the critical first of the month billing cycle, and for subsequent cycles.
Other benefits included:
- 80% reduced ingestion duration for meter data
- No impact on business run time
- 60% on prem storage reduced and uploaded to the AWS cloud
- Reduce OPEX and manual processes
- Reduced time to market, optimized
- Faster database back up and faster environment refresh
A Brief Overview of 5MS and Global Settlement
Five Minute Settlement (5MS) and Global Settlement (GS) are a set of regulatory rule changes made by the Australian Energy Market Commission (AEMC). The changes will take effect across the whole energy industry in Australia on 1 October 2021.
What are the actual changes?
5MS — financial settlement in the National Electricity Market will move from thirty minutes to five minutes, aligning price signals with the physical operations. Over time, this will likely lead to lower wholesale costs and reduced electricity prices.
GS — the way settlement is completed for retailers will change from “settlement by difference” to a “global settlement” framework. To enable a more transparent settlement process, AEMC requires all unmetered devices to be published on the market systems.
For more information on 5MS and Global Settlement click here