What does Scheduled Lite mean for the industry?
You may have heard about scheduled lite or voluntarily scheduled resources in recent energy market announcements. In this post, we’ll explain what scheduled lite is, how the scheduled lite idea has been given effect through the Integrating price responsive resources rule change, and what this means for owner-operators of non-scheduled BESS portfolios.
What is “scheduled lite”?
In the NEM, scheduled assets are subject to a number of technical and commercial obligations. They must inform the Australian Energy Market Operator (AEMO) of their availability (either to generate or consume electricity), bid into NEMDE, and participate in central dispatch. If they fail to conform to the dispatch instructions issued by AEMO, they can incur significant penalties. However, the means by which AEMO issues these commands (Automatic Generator Control or AGC) is quite complex and expensive for an asset to implement, so smaller assets are not normally scheduled. Batteries with a nameplate rating of <5MW (AC) per connection point are not required to be scheduled.
The term “scheduled lite” gained traction during the Energy Security Board (ESB) years, driven by concern about:
the increasing number of distributed/consumer energy resources (DERs/CERs) connecting to the grid, whose output was not visible to or controllable by AEMO; and
the potential system impacts of these resources collectively operating in response to market prices without AEMO’s control or oversight.
The idea was that scheduled lite would give AEMO greater visibility and control of unscheduled, price-responsive resources by incentivising them to participate in a “lite” version of the existing scheduling arrangements. Participants (e.g. operators of small battery fleets) would participate in central forecasting, submit dispatch offers and provide telemetry data, but would be subject to a lighter dispatch compliance regime, recognising the technical and operational characteristics of DERs compared to traditional scheduled plant. The hope was that implementation of scheduled lite would deliver market efficiencies due to more accurate forecasting and dispatch.
However, most operators of small DERs do their best not to be scheduled. This is because there are ways to benefit from spot price responsiveness without the implementation costs, technical challenges, compliance obligations, and potential penalties of the scheduling framework. The challenge the ESB faced was that no-one in industry could see any value in participating in scheduled lite. Many sceptically thought the idea would start as voluntary but ultimately become mandatory if the ESB couldn’t incentivise sufficient levels of participation.
“We use the term unscheduled in this post to refer to a DER (or aggregation) that is neither registered nor scheduled in central dispatch. The term non-scheduled is slightly different - it is a classification of registered Generator. All registered Generators must be classified as either scheduled, non-scheduled or semi-scheduled, meaning it is possible to be a registered Generator but not scheduled in central dispatch. In this post, we are talking about non-registered players, hence we use the term unscheduled.”
Re-branding. How you like me now?
Despite the pushback, AEMO developed a rule change request to give effect to scheduled lite mechanism. The rule maker, the Australian Energy Market Commission (AEMC), rebranded the idea to Integrating price responsive resources (IPRR), potentially in an attempt to shed the biases and fears that stakeholders had about the idea.
There’s a lot in the rule change request, but the final rule, published in December 2024, largely delivers on the scheduled lite vision. The rule implements a voluntary “dispatch mode” mechanism, allowing unscheduled price-responsive resources to offer into the spot market, set prices, receive dispatch instructions, and earn spot revenue.
To fix the incentive problem, the final rule gives AEMO a bucket of money and the ability to run tenders to pay participants to sign up. This incentive is capped ($50m total payments) and time-limited (only for the first five years). Beyond that, participation will depend entirely on whether small price-responsive resources see more value in being scheduled than being unscheduled.
That’s not Rakhesh, FYI.
What does this mean for operators of non-scheduled BESS portfolios?
The dispatch mode framework will commence in May 2027, with various guidelines to be developed in the meantime. At this stage, it’s unclear what the size and structure of the incentive payments will be, and therefore whether the benefits of participation will outweigh the costs and risks. As noted above, the framework is voluntary, so operators of non-scheduled BESS portfolios won’t be required to participate in dispatch mode if they don’t want to.
The biggest value we see in the rule change is the ability to access the regulation FCAS markets if you participate in dispatch mode. Currently, only market participants on AGC can provide regulation FCAS. AEMO is proposing to use its SCADA lite framework to enable this. The technical details still need to be worked out but, if delivered, it will unlock one more part of the value stack for unscheduled BESS.
It’s also important to note that the federal government has been eyeing IPRR as the mechanism by which DERs could participate in the capacity investment scheme (CIS). The CIS is a national underwriting mechanism that supports investment in new dispatchable resources such as battery storage. To date, only supply-side resources have been permitted to offer capacity in CIS tenders.
What is going to happen to the 5MW threshold?
Over the years, AEMO has made many noises about reducing the threshold for automatic exemption from registration (currently 5MW), largely to address the same problems identified by the ESB in the development of scheduled lite. The IPRR rule would seem to put those noises on hold for a while. If the incentive is sufficient, and the compliance regime is manageable, we may well see <5MW batteries, small generators, controllable loads, and other unscheduled resources signing up for dispatch mode. Participation levels might also increase if dispatch mode participation is a condition of CIS funding or a future underwriting scheme.
But the AEMC itself recognises that many unscheduled resources won’t participate in dispatch mode. To address this, the IPRR final rule requires AEMO to monitor and report on the impact of forecast deviations due to the operation of unscheduled resources, starting from April 2026. The AER will then use this information to assess the economic impact of these impacts, and the AEMC will look at both to see if something else needs to be done.
Crystal balling 🔮
It’s unclear how this will all play out, but we see two possible outcomes from the implementation of this rule change:
The benefits of dispatch mode drive levels of participation that improve forecast deviations and keep AEMO happy. This outcome staves off proposals to reduce the automatic exemption threshold or make dispatch mode mandatory for all/specific unscheduled resources.
Very few participants sign up for dispatch mode, and consequently AEMO sees no material improvement in forecast deviations due to unscheduled resources. The AEMC either revisits the entire framework and finds a rules-based solution, or AEMO takes matters into its own hands and seeks to force more unscheduled resources to become scheduled (e.g. through the powers it has through the registration/exemption framework). Existing sites tend to get grandfathered in rather than being forced to retroactively comply when major rule changes like this are implemented.
Optimists and more jaded realists will likely disagree over which of the two will win out.
Either way, the incentive mechanism is scheduled (lite, lol) to run between April 2026 and December 2031, which means an assessment of the success or otherwise of the IPRR rule is many years away. Sounds like a 2032 problem, like the opening of North Strathfield’s Metro stop 🥲
Build away, friends!*
*Not legal advice