On 4 April 2024, the Reliability Panel (Panel) published updated guidance on applying the emissions component of the national electricity objective (NEO). The Panel uses this guidance when considering emissions in the Panel’s rule-making and review projects.

Consistent with the updates made to the AEMC’s guidance, the updated Panel guidance also incorporates guidance from energy ministers on the interim value of greenhouse gas emissions reduction.

When the Panel is quantifying the estimated costs and benefits of a proposed reform that affects emissions, the Panel will use these interim values of emissions reduction to help decide whether the reform is in the long-term interests of consumers.

The updated guidance also includes additional information on how the Panel will estimate how many tonnes of emissions would be reduced (or increased) by the reforms considered under the Panel’s projects. The Panel will consider impacts on emissions across Australia, in the energy sector and related sectors where relevant. For example, the Panel’s decisions or recommendations may affect transport, household, and industrial emissions.

When estimating the impact of our rules on emissions, the Panel will take into account binding government policies that also reduce emissions. While the Panel’s work may be complementary to these policies, case-by-case consideration will be needed. These positions are consistent with the guidance from energy ministers.

This approach is also consistent with the NER, which requires that, in undertaking any review and preparing any report and recommendation, the Panel must take into consideration the policy statements, directions, or guidelines published by the AEMC from time to time. However, the Panel retains the flexibility to determine how to apply the AEMC’s guidance on emissions to specific Panel reviews and determinations.

The updated Panel guidance is available below.

The Reliability Panel’s previous consultation 

In August 2023, the Panel sought stakeholder feedback on whether its guide clearly explains how the Panel will consider the emissions reduction component in its work, and whether further guidance would be helpful.

This consultation was undertaken in parallel with the AEMC’s consultation on the Commission’s guidance.

Background 

The Panel forms part of the AEMC’s institutional arrangements and has its functions and powers conferred on it within the National Electricity Law and National Electricity Rules (NER). 

The Panel applies the NEO in its work in accordance with the NER and as specified in terms of reference from the AEMC. This includes the Panel’s work on the reliability standard and settings, the frequency operating standards, and the system restart standard, among other projects.

The national energy objectives were amended to include emissions in September 2023, by the Statutes Amendment (National Energy Laws) (Emissions Reduction Objectives) Act 2023 of South Australia. 

This change requires the Panel to consider the impacts of its decisions and recommendations on the achievement of Commonwealth, state and territory targets for reducing Australia’s emissions, as well as targets that are likely to contribute to reducing emissions (such as renewable energy and electric vehicle targets).

The Panel takes into account a list of the relevant targets published by the AEMC. The AEMC updates it as required. 

In September 2023, the Panel published the initial version of its guidance to stakeholders on applying the emissions component of the national electricity objectives.