The Australian Energy Market Commission (AEMC) is seeking feedback on 14 recommendations to improve the operation of the ‘retailer reliability obligation’ (RRO).

The draft recommendations are designed to improve the RRO by reducing costs for retailers in complying with the RRO and therefore, reducing costs for consumers.

Among these recommendations are options to revise the reporting timeframes for when retailers must report to the Australian Energy Regulator on how they have complied with the RRO.

Further, given the evolving nature of reliability gaps, with shifts from peak summer periods to other times of the year, we are proposing draft recommendations that would provide the Australian Energy Market Operator (AEMO) with additional time to trigger the RRO.

As the electricity market transitions to net zero and more renewable energy sources connect to the system, reliability needs to be carefully managed to meet the needs of households, businesses and industry. 

In 2019, on the advice of the Energy Security Board (ESB), federal and state Energy Ministers agreed to the RRO as a supplementary measure to the existing settings to help ensure a reliable supply of power for consumers.

The RRO was designed to encourage new investment in dispatchable energy technologies, essential for the reliable operation of the energy system. It does this by requiring retailers to establish contractual agreements with third parties when AEMO foresees a potential shortfall in energy supply. These agreements are designed to ensure retailers are adequately prepared to fulfil energy demands.

The AEMC is required under the national electricity rules (NER) to deliver a final report by June 2023. However, the timeframe has been extended, with a final report expected to be released in early 2024. This has allowed the AEMC access to more information and insights about market performance with the application of the RRO in place, from across a greater time period.

Submissions in response to the draft report are being accepted until Thursday, 2 November 2023.  

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au.