Benchmark Capacity Providers Review

The Reserve Capacity Mechanism (RCM) Review has introduced a provision in the WEM Rules that requires the Coordinator to review the Benchmark Capacity Providers.

The Benchmark Capacity Providers Review aims to ensure that the WEM Rules provide sufficient incentives for investment in new capacity to maintain system security and reliability at efficient cost to consumers.

The Benchmark Capacity Providers Review consisted of two key items:

1. Peak BRCP:
   1. review of the reference technology for the Peak Capacity product and assess whether the current reference technology is still appropriate or if a different reference technology should be selected to represent the most efficient new entry.
   2. review whether gross Costs of New Entry or net Costs of New Entry should apply to the Peak BRCP.
2. Flexible BRCP
   1. Review of the reference technology for the Flexible Capacity product; and
   2. Review whether gross Costs of New Entry or net Costs of New Entry should apply to the Flexible BRCP.

This Review is being conducted in consultation with the Market Advisory Committee and the RCM Review Working Group. The Benchmark Capacity Providers Review has been discussed at the following meetings:

RCMRWG

• 14 July 2022
• 21 September 2023
• 19 October 2023

MAC

• 12 October 2023
• 23 November 2023

Documents for these meetings can be found below.

A Consultation Paper was published on 2 November 2023. This paper set out the findings and the proposals resulting from the Benchmark Capacity Providers Review.

The window of submitting feedback closed at 5:00pm (AWST) on 30 November 2023.

On 18 December 2023, the Coordinator published the first Determination of the Benchmark Capacity Providers.

In summary, the Coordinator has determined that:

1. The Benchmark Peak Capacity Provider will be a lithium battery energy storage system with:
   • 200 MW injection;
   • 800 MWh energy storage;
   • a 330 kV connection near Kwinana or Pinjar
2. The Benchmark Flexible Capacity Provider will be a lithium battery energy storage system:
   • 200 MW injection;
   • 800 MWh energy storage;
   • a 330 kV connection near Kwinana or Pinjar

Benchmark Reserve Capacity Prices will be determined on a gross CONE basis.