Rule Change: Open

Overview

This rule change request from AEMO seeks broad changes to the Reliability and Emergency Reserve Trader (RERT). The RERT is a type of strategic reserve that allows AEMO to pay a premium for additional capacity to be on stand-by in case of emergencies when the demand and supply balance is tight.
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This rule change request from AEMO seeks broad changes to the Reliability and Emergency Reserve Trader (RERT). The RERT is a type of strategic reserve that allows AEMO to pay a premium for additional capacity to be on stand-by in case of emergencies when the demand and supply balance is tight.

Through this rule change process, the Commission will consider the overall RERT framework, including:

  • the appropriateness of the reliability standard, and hence whether it is still the appropriate procurement trigger for the RERT
  • what the lead time should be for AEMO ahead of procuring reserves
  • whether RERT products need to be standardised.

Options paper

On 18 October 2018 the Commission published an options paper for this rule change request. The options paper outlines ways the RERT procurement trigger and procurement volumes could be designed and seeks stakeholder feedback on these. It also sets out how we are planning to consider the appropriateness of the reliability standard, including taking into account AEMO’s inputs, for stakeholder feedback. Stakeholder submissions were due by 29 November 2018.

Stakeholder workshop

The AEMC held a public workshop for stakeholders on Monday 12 November 2018 in Sydney. 

At the workshop, the AEMC discussed the options paper and gathered feedback from participants. AEMO also discussed its views on the appropriateness of the reliability standard, building on its views set out in the rule change request.

A recording of the webcast is available here. A copy of the slides are available below.

Technical working group

A technical working group is helping to inform the AEMC’s assessment of this rule change request. The group comprises experts from generators, network businesses, retailers, consumer groups and AEMO. 

Meetings have been held on 4 September 2018 and 20 November 2018. Minutes of these meetings can be found below. 

Extension

On 4 October 2018 the Commission extended the period of time to make the draft determination to 31 January 2019, under section 107 of the National Electricity Law. The Commission considers that this extension is necessary due to the complexity of issues raised by the rule change request including the impact that changes will have on the costs that consumers face. Stakeholders have also raised a number of complex issues in their submissions.

In addition, the extension will  allow the Commission to incorporate:

  • advice it has received from the Reliability Panel on the appropriateness of the reliability standard
  • AEMO’s views on the appropriateness of the reliability standard, which incorporate more recent analysis. This information will be available in mid-November 2018. 

The Commission has published both its request to the Panel on the appropriateness of the reliability standard, and the Panel’s response. These can be found below. 

Next steps

The draft determination for this rule change is scheduled for publication on 31 January 2019.

Background

Consultation paper
On 21 June 2018 the Commission initiated its assessment of the proposed rule with the publication of a consultation paper for stakeholder comment.  Twenty-five submissions were received. All public submissions can be found below.

AEMO’s RERT rule change requests
On 9 March 2018 AEMO submitted two rule change requests to the AEMC in relation to the RERT: 

  • the first rule change request extended the period allowed for AEMO to contract for reserves ahead of a projected shortfall, in effect, reinstating the long-notice RERT. The Commission considered this as an urgent request, and made a final rule to reinstate the long-notice RERT on 21 June 2018. This allows AEMO to use the long-notice RERT to procure reserves for the upcoming summer.
     
  • the second rule change request (i.e. this rule change request) proposes broader changes to the RERT framework and is subject to a separate rule change request process. This was initiated on 21 June 2018.
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Documentation