Market Review: Completed
An important determinant of reliability in the NEM is the reliability standard, which is the maximum allowable level of electricity at risk of not being supplied to consumers in any NEM region. In its management of power system reliability, AEMO can use any one of three reliability intervention mechanisms, of which the Reliability and Emergency Reserve Trader (RERT) is one.
The RERT allows AEMO to contract for reserves ahead of a period where reserves are projected to be insufficient to meet the reliability standard (known as a projected reserve shortfall). AEMO is able to dispatch these reserves to manage power system reliability and, where practicable, security. The RERT, or some form of power for the market operator to contract for reserves, has been a feature of the NEM since its commencement in December 1998.
On 23 June 2016, the AEMC made a final Rule determination on the RERT provisions in the Rules. Among other things, the final Rule reduces the timeframe in which AEMO may contract for reserves, from nine months to ten weeks ahead of a projected shortfall.
The final Rule requires the Reliability Panel (Panel) to amend the RERT Guidelines to reflect the changes made as a result of the final Rule.
The Panel published a final report on 15 December 2016, which sets out the Panel’s amendments to the RERT Guidelines and its rationale for those changes. This includes:
- removing references to ‘long notice situations’ in the Guidelines;
- clarifying that AEMO is able to seek reserve offers from RERT panel members and other potential reserve providers when contracting for reserves in ‘medium notice situations’; and
- clarifying that information about the RERT panel is confidential.
A draft report was published for consultation on 29 September 2016. A draft of the Guidelines with the proposed marked-up amendments was also published with the draft report to facilitate stakeholder feedback.
Submissions to the draft report closed on 10 November 2016 and two submissions were received.