Report
January 29, 2016
Western Australia’s Transition to a Competitive Capacity Auction
Prepared for EnerNoc
The Western Australia Public Utilities Office (PUO) outlined its proposal for reforming the Reserve Capacity Mechanism (RCM) into a competitive auction-based mechanism that meets reliability objectives at lower cost. However, the PUO was concerned that if it instituted the auction immediately, a sudden large drop in capacity payments could impair suppliers and threaten the sustainability of the electricity market. The PUO therefore proposed a transitional mechanism intended to balance the competing objectives of reducing excess capacity and customer costs, while mitigating price impacts on suppliers.
