Penalty for Queensland generator over inability to supply frequency control services

Penalty for Queensland generator over inability to supply frequency control services

AU Energy Compliance
Frequency control ancillary services (FCAS) is used by AEMO to maintain the frequency of the system within tolerances and around 50 cycles per second. FCAS is a mechanism for ensuring balance within the market which can be variable and volatile. FCAS providers are especially important as the uptake of renewable energy within the NEM continues. On 22 February 2021, the AER announced that CS Energy has paid $200,000 in penalties for allegedly failing to ensure that it could provide FCAS that it had already offered to the market. CS Energy has also repaid $1.13 million to AEMO, which it had received as payment to provide the services. In a comment on the incident, AER Chair Clare Savage said: “Inaccurate information about FCAS offers undermines AEMO’s ability to manage frequency deviations…
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Substantial increases in penalties for non-compliance in the energy sector

Substantial increases in penalties for non-compliance in the energy sector

AU Energy Compliance
Summary: As a result of recent reforms discussed below, non-compliant energy businesses in NECF now face penalties of up to 10 percent of their annual turnover or $10,000,000. Consequently, all energy businesses should seriously re-examine their compliance programs and regulatory controls. On 20 March 2020 Energy Ministers in what was then the COAG Energy Council agreed to implement changes to the National Energy Laws (national Electricity Law, National Gas Law, and National Energy Retail Laws) to provide for substantial increases to the civil penalties for non-compliance by energy businesses. The proposed changes were implemented by the Statutes Amendment (National Energy Laws) (Penalties and Enforcement) Act 2020 (Act), which was given Royal Assent on 22 October 2020 and the National Energy Regulations, came into force by Proclamation on 29 Jan 2021. The new penalty…
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The proposal to ban embedded networks in Victoria

The proposal to ban embedded networks in Victoria

Uncategorized
In October 2018, the Victorian Government announced an election commitment to ban embedded networks in new residential developments in Victoria. Since that time little has been publicly said about the proposed ban and, presumably, industry has lobbied the relevant ministers to highlight benefits of embedded networks and the impact of a ban on consumers and the industry. The election commitment was not forgotten however and the Victorian Government appointed an Expert Panel whose work consists of reviewing the options available as a policy response and advising the Government accordingly. The Victorian Government has also since opened up a consultation on the election promise - which they now say included appropriate 'exemptions for buildings that use renewable energy microgrids to deliver low-cost renewable energy to apartment buildings.' The consultation includes an…
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Converting Existing Buildings into Embedded Networks

Converting Existing Buildings into Embedded Networks

AU Energy Compliance
Today we are looking at the 'retrofit process' for embedded networks. We focus on the eastern states, other than Victoria - which has its own regulatory framework. Under the National Electricity Rules (NER), any party that engages in an electricity transmission or distribution activity must either be registered with the Australian Energy Market Operator (AEMO) as a network service provider (NSP) or operate under an exemption. If that same entity sells electricity then it will also require either a retail exemption or a retail authorisation. We've discussed that distinction in more detail here. A retrofit involves an Embedded Network Operator (ENO) converting an existing building (with separately metered sites) into an embedded network. This results in the building having a single connection point where electricity is purchased in bulk and…
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ASIC’s report on regulatory technology

ASIC’s report on regulatory technology

AU Energy Compliance, Financial Services
The Australian Securities and Investment Commission (ASIC) has published a report (Report 685) on ASIC’s Regtech initiatives during 2019-2020. We’ve spoken previously about the benefits of advanced software when it comes to regulatory compliance. Compliance processes are generally complex. They have many moving parts, and the amount of time and money required to enact processes can be high. Compliance management systems such as the Compliance HUB can simplify these processes and save a business both time and money. The ultimate aim of products such as the Compliance HUB is to embed compliance into decision-making. Compliance management software can simplify compliance processes by streamlining and simplifying tasks, eliminating redundancies, and improving efficiency. For example, automation can be used to automate the review and approval of large quantities of documents. This frees…
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Should Your Business Invest in a Compliance Management System?

Should Your Business Invest in a Compliance Management System?

AU Energy Compliance, Financial Services
Businesses around the world face challenges in managing regulatory compliance. Compliance requirements and the regulatory environment are constantly changing and there is no 'one-size-fits-all' solution. Companies are constantly faced with a balancing act between the risk of not complying with rules and the cost of having to comply with the rules. Companies are not the only ones that are affected by these challenges. They have a huge impact on the public sector and the general public. When it comes to investment in software, businesses typically start with a customer relationship management system and then sales and marketing software. Traditionally, compliance software is not considered a priority. Many businesses use excel spreadsheets to track their regulatory obligations. And yet, with the potential cost of non-compliance, is that an adequate approach? As…
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Spot the difference: Legal vs Compliance

Spot the difference: Legal vs Compliance

AU Energy Compliance, Building and Construction, Consumer, Financial Services, NZ Energy Compliance
Many large businesses have both in-house legal teams and compliance teams. What is the difference between the two and how do you know if you need a legal or a compliance professional? The role of an in-house legal team Of the two, the role of an in-house lawyer is probably more easily defined. Their role involves managing legal risk and providing legal services that support business growth. On a day-to-day basis, this includes reviewing contracts, interpreting the law, managing disputes and litigation, managing employment law matters, and providing legal advice on areas such as privacy law. In-house legal teams are staffed by qualified lawyers and are typically supported by external law firms engaged on panels. Having an in-house lawyer can be a very good investment for a business seeking to…
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Are You putting Your Business at Risk with inadequate Compliance Controls?

Are You putting Your Business at Risk with inadequate Compliance Controls?

AU Energy Compliance, Building and Construction, Consumer, Financial Services, NZ Energy Compliance
History is littered with spectacular compliance failures; from Eron to WorldCom and the shocking findings of Australia's recent Banking Royal Commission. And yet, we can expect more compliance failures to come. Which begs the two questions- why is that and what can be done about it? In reality, compliance is often seen as an afterthought by business leaders and founders. While founders want to grow innovative and successful businesses, the truth is that a founder’s first priority should be not just building a great company, but on building a great company that can last. Compliance is Critical to the Longevity of a Business While regulation and compliance don't exactly scream "sexy," they are crucial to the longevity of a business [for an interesting article on how to make compliance more…
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Upcoming Webinars on Energy Regulation

Upcoming Webinars on Energy Regulation

AU Energy Compliance
Compliance Quarter is an energy regulatory specialist firm. We run webinars relevant to energy businesses operating in Australia. You can join our webinar training sessions for free. Simply register using the links below. All of our webinars are recorded and available on-demand. Be sure to register to get access even if you can't make it on the day. 15 January 2021: Compliance obligations for customer facing staff: What are the key things to know when it comes to customer facing staff. Register here: https://us02web.zoom.us/webinar/register/WN_seWF1TpKRBKiLbp8Hvmjsw 22 January 2021: Life support obligations in more depth: Looking in more depth at the life support obligations in NECF and Victoria. Register here: https://us02web.zoom.us/webinar/register/WN_4RCz1mcrShCeR58gGXwUKA 4 February 2021: Managing regulatory obligations as risks: Examining the adequacy of your controls. Register here: https://us02web.zoom.us/webinar/register/WN_TPzL1IRDRvGrkFMRQrnXeA Do you have a…
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RRO triggered in NSW

RRO triggered in NSW

AU Energy Compliance
The AER has accepted a recommendation from AEMO and has made the T-3 reliability instrument triggering the Retailer Reliability Obligation (RRO). In making this decision the AER considered if AEMO’s reliability forecast contained any material errors in either calculation or input data, or inaccurate assumptions that materially impact the forecast reliability gap. The AER also considered if AEMO had used reasonable endeavours to prepare the reliability forecast in accordance with the AER’s Forecasting Best Practice Guidelines. No material errors or inaccurate assumptions were identified by the AER and as such it made the reliability instrument. The reliability instrument applies during weekdays from 1 January to 29 February 2024, for the trading periods between 3 PM and 8 PM AEST. What this means is that liable entities in NSW should consider…
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