Formal Code consultation submission to NGMC,
              concerning Embedded Intermittent Generation
                     (wind, solar, micro-hydro)

Date: 	8 May 1996
To: 	NGMC, Melbourne Office


From: Michael Gunter, owner Breamlea wind generator (BWG)

Copies:	Powercor Australia - Craig Hobbs, Network manager
	CitiPOWER Ltd - Don Vigilante, Energy Trading Analyst
	Office of the Regulator General, Victoria - Ross Carty
	Victorian Department of Treasury and Finance, Energy Policy Division - Rodney Ward
	Dept of Environment, Sport & Territories, Climate Change Branch - Richard Begley
	Energy Australia - Phil Gates, Retail Energy Division

Hypothesis: "There is nothing in the VPX or NGMC Codes which specifically
prohibits an embedded generator selling energy *indirectly* to its local
Participant Retailer."

In the case of the Breamlea wind generator (BWG), a financial arrangement
has been reached with CitiPOWER Ltd that all BWG energy export is sold to
CitiPOWER Ltd. CitiPOWER and Powercor have apparently recently reached 
in-principle agreement that Powercor will pay CitiPOWER an agreed sum for
BWG energy export. Since all the physical energy from Breamlea is consumed
within Powercor's boundaries, Powercor is argued to be purchasing Breamlea
export in its entirety, albeit via a third party.

I would appreciate the views of ORG, VPX, and NGMC concerning the above
arrangements, and whether they are consistent with Clause 3.3.2 (a) of 
the NEM Draft Code.

The National Code will rightly ensure that network costs are equitably 
apportioned to embedded generators. Market forces appear to be building 
rapidly to facilitate the emergence of a renewable/sustainable generation 
market. This market should be allowed to trade energy across the whole 
national grid as it evolves, and any embedded generator should be able 
to sell energy throughout the interconnected grid, pursuant to 

* the principles set out in the NGMC document "General Overview of the 
Market Framework" CCWG008.DOC Clauses 1 (c) & (d), and

* recent input from the Federal Department of Environment, Sport & 
Territories expressing concern about removing "fundamental barriers to 
small generators". 


The intent of 3.3.2 (a) may have been to require all embedded generators 
trading exported energy outside their local Participant Retailer to apply 
for Participant status. However a literal interpretation of "......is 
deemed to be a Participant Generator............." could be taken to mean 
that BWG will automatically become a Participant, even without formally 
applying or having Code-compliant metering, simply by virtue of its contract
with CitiPOWER Ltd. Clarification may be needed in this Clause.

If the above assumption of the intent of 3.3.2 (a) is correct, I believe it 
is contrary to fair trading in the emerging renewables market, and should 
be modified to allow non-participant small-scale sustainable generators to 
trade throughout the NEM, unless there are insurmountable technical reasons 
why their tiny energy packets have to be traded through the pool. If 
Participant status is made mandatory, then some exemptions regarding costly 
Code-compliant metering should be available for generators with average 
annual export below say 1GWh (approx. 114 kilowatts continuous).

A mature renewables market would probably have no problem with most 
renewable generators being Participants, but there will always be some very 
small players who will not be economic unless given a fair chance to trade 
beyond the monpoly of their local Participant Retailer. Breamlea wind 
generator is a case in point, and I believe that the proposed energy deal 
between Breamlea, CitiPower and Powercor is an equitable and practical 
solution, which is not contrary to Clause 3.3.2 (a) as currently drafted, 
provided that the opening hypothesis is accepted as valid.


Michael Gunter                                                                                

Owner, Breamlea Wind Generator