The Reliability Panel has found the current form of the reliability standard is well suited to ensure high levels of system performance as the National Electricity Market (NEM) transitions to net zero emissions.
The assessment is detailed in a final report following extensive stakeholder consultation, which overwhelmingly supported maintaining the current form of the reliability standard.
The reliability standard, a cornerstone of Australia's energy system, ensures sufficient electricity supply to meet consumer demand and determines other key market settings, such as the market price cap.
Tim Jordan, chair of the Reliability Panel, emphasised the importance of forward looking analysis:
''As we navigate an unprecedented market transformation, understanding future reliability risks is crucial.
''Our modelling provides critical insights about the future needs of the power system, particularly about the storage needed to manage reliability risks," he said.
The Panel's innovative modelling tested artificial extreme scenarios where there are not enough resources to meet the needs of customers.
Results demonstrated that while the risk profile will change as we rely more on variable renewable generation, the current form of the reliability standard will continue to provide the signal to invest in and operate the assets needed to manage the risk of reliability shortfalls.
The Panel acknowledges the challenges faced by the Australian Energy Market Operator (AEMO) in managing reliability and supports AEMO's efforts to improve communication of the reliability standard.
The final report also recommends maintaining the current form of the administered price cap which acts as a safety net by capping wholesale prices following prolonged periods of extreme prices.
The Panel will regularly review the price cap to ensure generation and storage continue to contribute to reliability during rare emergencies.
View the project page for more information and contact details.
Media: Jessica Rich, 0459 918 964, media@aemc.gov.au.