The AEMC has received two rule change requests from AEMO relating to aspects of the strategic reserve mechanism in the national electricity market known as the RERT. Today we initiated the first of these rule changes. 

The AEMC has published a consultation paper on a rule change request from AEMO to extend the timeframe for contracting emergency electricity reserves ahead of a projected shortfall under the reliability and emergency reserve trader (RERT).

The 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. 

Currently, AEMO may contract for reserves under the RERT for up to 10 weeks ahead of a projected shortfall.  AEMO considers that 10 weeks is too short and acts as a barrier to entry to a wider range of potential providers. In particular, AEMO’s recent demand response trials with ARENA have shown that short procurement lead times can make it challenging for demand response providers to participate in the RERT. AEMO proposes to increase the lead time to nine months.

The Commission is progressing this rule change under an expedited process as an ‘urgent rule’ so any changes can be applied in readiness for next summer. Stakeholders can object to this expedited process by 10 May 2018. 

Submissions on the consultation paper are due by 24 May 2018.

Stakeholder workshop

The AEMC is holding a stakeholder workshop on this rule change request: 

Date: Thursday 3 May 2018
Time: 10:30am to 11:30am AEST (Sydney/Melbourne time)
Location: via teleconference

An agenda, dial-in details and relevant documents will be circulated to registered attendees before the workshop.

Register for the workshop by Tuesday 1 May 2018.

If you have any questions please contact Sarah-Jane Derby at sarah.derby@aemc.gov.au or on (02) 8296 7823.

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 Commission is progressing the two rule change requests under different timeframes. The Enhancement to the RERT rule change request is due to be initiated in June 2018. 

Media: Prudence Anderson, Communication Director, 0404 821 935 or (02) 8296 7817.