Skip to content

ESEM Contract Co-Design Consultation

The Electricity Contract Co-Design Working Group is inviting industry stakeholders to help shape the ongoing development of contracts that could underpin trading activities and the proposed Electricity Services Entry Mechanism (ESEM) and Market Making Obligation (MMO).

Consultation is now open on the draft contract structures identified by the Working Group:
  • Bulk energy: Regional Reference PPA
  • Firming: Dynamic Time of Day Block Spread Swap
  • Shaping: $600 Cap Contract
How your feedback will be used
Industry feedback will be reviewed, analysed and considered by the Working Group in further developing preferred contract structures and recommendations within their Final Report due to be delivered in November 2026. Following the consultation, the WG will also release a summary of the feedback received.

Please review the Consultation Paper prior to completing the consultation survey form. All questions included in the survey form are also listed on the Consultation Paper. We ask that all consultation feedback aligns with questions provided.

Consultation closes 5pm AEDT, Friday 2 October 2026.


Organisation and contact details(Required.)
Document upload (optional)
No file chosen



Bulk energy: Regional Reference PPA
Q1. Is the proposed contract structure suitable for a range of bulk energy technologies?
Q2. Does a cap on spot price exposure aligned to the strike price of the firming product (e.g. $600/MWh) appropriately balance risks for sellers and buyers?
Q3. Is a negative price provision required for the proposed contract, noting it is settled against the Reference Fleet’s performance and LGCs/REGOs are not included in the swap? If so, is a volume knock-out (no settlement during negative price periods) or a $0 price floor more preferable?
Q4. Does the proposed design of the Reference Production Index appropriately balance risks for sellers (primarily basis risk) and buyers (long-term value of the product)?
Strongly favours sellers
Somewhat favours sellers
Appropriately balanced
Somewhat favours buyers
Strongly favours buyers
Risk balance



Shaping: Dynamic Time of Day Block Spread Swap
Q5. Does the proposed approach to determining charge/discharge periods on a day ahead basis, using residual demand calculation, appropriately balance operational risks/simplicity with long-term value?
Q6. Does the use of AEMO’s forecast data to determine shaping periods result in any material risks to the useability of this contract over the long-term?
Q7. Does the proposed approach of determining nominations at 4pm on a day ahead basis pose any material operational risks?
Q8. Does the proposed Daily Shaping Period that commences at the Trading Interval ending at 09:05 and finishes at the Trading Interval ending at 09:00 the following day pose any material operational risks?



Firming: $600 cap
Q9. Is a $600 cap, in comparison to a $300 cap, appropriate to support the entry of new firming assets? If not, why?



Common Contract Features
Q10. Are there any concerns with the proposed weekly settlement approach, aligned to the AEMO settlement calendar?
Q11. Are alternate approaches to manage Force Majeure risk exposure (outside of the contracts) required to support the entry of new assets?



Overarching Feedback
Q12. Do the proposed contract structures achieve the Working Group’s Terms of Reference and perform well against the identified evaluation criteria?
Very poor
Poor
Medium
Well
Very well
Bulk energy: Regional Reference PPA
Shaping: Dynamic Time of Day Block Spread Swap
Firming: $600 cap

Q13. Are there any concerns with the ability of the contract structures proposed to be subject to a Market Making Obligation (MMO) in the future?
Significant concerns
Some concerns
Neutral
Expect contracts to perform well
Expect contracts to perform very well
Bulk energy: Regional Reference PPA
Shaping: Dynamic Time of Day Block Spread Swap
Firming: $600 cap
Q14. Will the proposed contract structures, in conjunction with other risk management contracts, such as flat swaps, evening peak swaps or caps, be effective for buyers (e.g. retailers, large loads, etc.) to manage financial risks?
The Working Group intends to publish submissions received as part of the ESEM Contract Co-Design Consultation to ensure transparency of process. Please select from the following options.(Required.)
Thank you for participating in the consultation on draft contract structures for the ESEM and MMO. A summary of feedback will be made available following the completion of the consultation.