The Australian Energy Market Commission has published a final rule to improve the efficiency and clarity of mechanisms for intervening in the market when the power system becomes insecure or unreliable.

Intervention mechanisms refer to the reliability and emergency reserve trader (RERT), directions and instructions. The RERT is the power system’s emergency reserve mechanism. There has been a significant increase in the use of intervention mechanisms by the Australian Energy Market Operator (AEMO) over the last three years, primarily in response to system security issues such as inadequate system strength in South Australia. In response to this increased reliance on intervention mechanisms, AEMO and the AEMC have undertaken reviews relating to intervention pricing and the interventions framework, resulting in a number of recommended changes to the interventions framework.

The final rule amends the National Electricity Rules (NER) to reduce costs to consumers while maintaining efficient price signals and incentives for investors when AEMO intervenes in the market. 

Stakeholders did not raise substantial issues with the proposed rules during consultation of the draft rule and no substantial policy or legal changes were made from the draft rule.

The final rule is made in response to three rule change requests from AEMO, which took up recommendations on intervention mechanisms made by the AEMC’s August 2019 Investigation into intervention mechanisms in the NEM. The rule change was fast-tracked as stakeholder feedback on this issue was initially sought and received in 2019 as part of the AEMC’s earlier work.

Media: Kellie Bisset, Media and Content Manager, 0438 490 041