Final determination to extend the Reliability and Emergency Reserve Trader

23 June 2016

The Australian Energy Market Commission (AEMC) has made a rule to indefinitely extend the Reliability and Emergency Reserve Trader (RERT) arrangements, thereby preserving its safety-net feature within the complement of permanent intervention mechanisms available to AEMO to manage power system reliability in the NEM.

The more preferable Rule released today supports the efficient operation and use of electricity services and addresses issues identified by the rule request’s proponent, the COAG Energy Council.

The key features of the Rule are as follows:

  • the RERT’s sunset clause will be omitted with effect from 23 June 2016. This means that the RERT arrangements will continue unless and until a rule change amends or omits them;
  • the period allowed for AEMO to contract for reserves ahead of a projected reserve shortfall will be shortened to allow greater opportunity for a market response to address that shortfall. The timeframe will reduce from nine months to 10 weeks, from 1 November 2017. This minimises any market distortionary effects of the RERT’s indefinite extension; and
  • the Reliability Panel will be required to amend the RERT guidelines and AEMO will be required to amend the RERT procedures to reflect the changes to the RERT arrangements.

In order to avoid any doubt, the Rule provides that the changes do not affect any reserve contract entered into before 1 November 2017.