The AEMC today has made a final rule to allow AEMO to procure generation and demand response capacity nine months ahead of a projected reserve shortfall under the reliability and emergency reserve trader (RERT) framework. 

The Reliability and Emergency Reserve Trader (RERT) is one of the tools available to AEMO to help avoid blackouts. It is a type of strategic reserve that allows AEMO to pay a premium for additional generation or demand response that’s not already in the market to be on stand-by when shortages are projected. 

Increasing the procurement lead time to nine months effectively reinstates what was known as the long-notice RERT. 

The ability for AEMO to contract for generation or demand response capacity nine months in advance of a projected shortfall means there will be more  options for AEMO to choose from. This may improve the efficiency of the procurement process and put downward pressure on costs.

This rule change was progressed under the expedited process so AEMO can use it as soon as possible, if necessary, including in advance of next summer. 

This rule is also part of the AEMC’s security and reliability action plan to provide AEMO with the tools it needs to manage the changing power system. The ability for AEMO to procure the long-notice RERT will commence on 13 July 2018.

Media: Bronwyn Rosser, Communication Specialist, 0423 280 341, bronwyn.rosser@aemc.gov.au

Background: AEMO’s RERT rule change requests

On 9 March 2018 AEMO submitted two rule change requests to the AEMC in relation to the RERT: 

• the first rule change request seeks to extend the period allowed for AEMO to contract for reserves ahead of a projected shortfall
• the second rule change request (Enhancement to the RERT) proposes broader changes to the RERT framework and is subject to a separate rule change request process. 

The Enhancement to the RERT rule change request was initiated today, 21 June 2018.