The Reliability Panel’s 2019 Annual market performance review provides observations and commentary on the security, reliability and safety of the national electricity market during the 2018/19 financial year. 

It compiles information collected from a number of sources including the Australian Energy Market Operator, the Australian Energy Regulator, jurisdictional regulators and market participants. 

This year, the Panel has developed a data portal so stakeholders can easily access the key data sets used in the report.

The review is designed to:

• provide stakeholders with consolidated information and expert commentary about the performance of the power system and market in a single publication 
• highlight emerging trends to help inform the policy and investment decisions of governments, policy makers, market institutions and market participants  
• identify options to improve the frameworks or mechanisms used to deliver reliability, security and safety.

The Reliability Panel undertakes this review each financial year in accordance with the National Electricity Rules and terms of reference from the AEMC.

Key findings of 2019 review

• The reliability performance of the NEM has been satisfactory during 2018/19 with the regulatory framework including its intervention mechanisms, being leveraged to support reliable delivery of electricity to customers. However, the Panel is concerned by the increasing reliance on interventions to maintain reliable supply. Using emergency tools means the market is not delivering sufficient capacity to meet demand and indicates a need for new investment that can be relied upon at times when consumers need it. 
• Power system security continues to be a challenge to maintain as we transition towards a lower emissions electricity sector and a generation fleet with different technical characteristics compared to what the power system was designed around. The NEM is at the global forefront of dealing with these issues and working towards addressing them by identifying and valuing the services needed. Some solutions may only be temporary fixes and others may take time to mature and become effective.
• The Panel notes that its safety role for the purposes of this report relates primarily to the operation of assets and equipment within their technical limits. The Panel is not aware of any incidents during the 2018/19 reporting period where AEMO’s management of power system security has resulted in a safety issue with respect to maintaining the system within relevant standards and technical limits. 

Panel insights

In order to address the reliability challenges identified in the 2019 review, it is the Panel’s view that focus should be given to:

• adapting our approach to delivering reliable supply to changing power system conditions and community expectations
• improving coordination and total system thinking to reduce total system costs and maximise total system benefits
• fostering regulatory and policy certainty wherever possible to underpin new investment. 

In order to address the security challenges identified in the 2019 review, it is the Panel’s view that focus should be given to:

• clearly articulating the type and level of services required 
• incentivising investment in system services – noting we may need different approaches to valuing and procuring each of them 
• leveraging the opportunities associated new technologies as we transition.

The Panel acknowledges the significant body of work underway that is considering how to maintain the ongoing security and reliability of the NEM. 

Immediate challenges are being addressed through urgent work streams - sometimes with interim solutions being put in place while a longer-term solution is developed, which takes account of the evolution of technology. 

Background

On 21 November 2019 the Reliability Panel initiated the review and sought comments from stakeholders.

On 12 March 2020 the Reliability published its final report. 

On 6 April 2020 the final report was republished with minor amendments to two charts. Figure 2.17 was amended to correct axis labels and Figure 3.12 was amended to indicate when the administered price cap was in place. 

The Reliability Panel

The Reliability Panel's core functions relate to the security, reliability and safety of the national electricity system. The focus of the Panel's work is on determining standards and guidelines which are part of the framework for maintaining a secure and reliable power system. 

The Panel is chaired by AEMC Commissioner, Charles Popple. Its members are broadly representative of all stakeholders interested in the operation of the power system and the electricity market including consumer groups, generators, network service providers, retailers and the power system and market operator, AEMO.

The Panel has published a background paper on current considerations for the reliability standard and a plain-language fact sheet on what the standard means and how it is used.