The Australian Energy Market Commission (AEMC) has released a draft rule to extend the ‘interim reliability measure’ (IRM) for three years to support the reliability of the electricity system.

The AEMC today published a draft determination following the outcome of its recent Review of the Interim Reliability Measure and in response to a rule change request on the subject from the Australian Energy Market Operator (AEMO).

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

In 2020, federal and state energy ministers, on the advice of the Energy Security Board (ESB), agreed to the IRM of 0.0006 per cent expected ‘unserved energy’ to meet community reliability expectations for supply during a “one-in-10-year summer” event.

The IRM acts as a trigger for two measures designed to provide more certainty on reliability, including the RRO, which encourages retailers to contract with other parties, such as generators, to fulfil energy demand.

The IRM is also a trigger for the ‘interim reliability reserve’ (IRR), an “out of market” capacity reserve. 

On 25 May, the AEMC concluded its review of these interim arrangements, as required under the National Electricity Rules (NER) and released a final report recommending the application of the IRM to the RRO be extended to 30 June 2028.

With the transition expected to occur at a great scale and pace across at least the next five years, the AEMC considers that the IRM has an important role to play in managing ‘tail risk’ or high impact events with a low probability of occurring in the system until 2028.

While the AEMC has published a draft rule to extend the tighter standard for the RRO by three years, the IRM is considered a provisional measure until the Reliability Panel has completed its more comprehensive assessment of how tail risk should be managed in the form of a new long-term reliability standard. 

The AEMC considers that this draft rule is in the best interests of consumers and will consider all stakeholder views in making its final determination.

The draft rule is being actioned through the AEMC’s ‘fast-tracked’ process on the basis of analysis and consultation having been carried out through the review.

Stakeholders will have six weeks to provide feedback on the draft rule and draft determination paper, with submissions closing on 24 August 2023.  

The Commission will consider reviewing the need for the IRM beyond 30 June 2028, following the 2026 Reliability Standards and Settings Review.

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

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