Firm Energy Reliability Mechanism

We are an appointed regulator for South Australia’s Firm Energy Reliability Mechanism

The Firm Energy Reliability Mechanism (FERM) scheme is designed to ensure secure, reliable and affordable electricity supply in South Australia by ensuring there is sufficient long duration firm capacity to meet the state’s needs.

What is firm capacity?

Long duration firm capacity is types of generation or storage that can supply electricity for more than 8 hours continuously.

The FERM scheme is predominantly designed to encourage investment in this type of generation or storage in South Australia. Electricity entities to be offered FERM agreements are selected through a competitive tender.

Our role within the scheme

On 19 February 2026, the South Australian Government appointed the AER as one of the Scheme Regulators under the National Electricity (South Australia) (Firm Energy Reliability and Orderly Exit Management) Regulations 2025.

Scheme Regulators are responsible for overseeing the operation and performance of the scheme. Our role includes monitoring entities’ compliance with the Scheme, making annual contribution determinations, publishing Scheme guidelines and approving a risk management framework applying to the Financial Vehicle.

The Essential Services Commission of South Australia (ESCOSA) has also been appointed as a Scheme Regulator. ESCOSA’s role includes issuing notice of intention requests, auditing the performance of scheme entities, preparing annual reports for the Minister for Energy and Mining and developing guidelines.

Risk management framework

One of the AER’s functions is to approve the risk management framework as developed by the Scheme Administrator, AusEnergy Services Limited (ASL).

We approved the framework in March 2026.

Read the risk management framework

View our letter of approval

AER - Scheme Regulator

Our role as a Scheme Regulator is to oversee and monitor compliance with the scheme.

The costs of the scheme will be recovered from South Australian consumers through the yearly contribution determination which will be made by the AER.

ESCOSA - Scheme Regulator

The FERM scheme requires capacity commitments from all recognised long duration capacity providers.

ESCOSA will oversee the process for existing energy providers in South Australia to declare Notices of Intention. ESCOSA also has roles auditing the performance of scheme entities, preparing annual reports for the Minister for Energy and Mining and developing guidelines.

ASL - Scheme Administrator

As the Scheme Administrator, ASL are responsible for managing the competitive tender process, entering and managing FERM contracts, and administering FERM Scheme financial functions.

The Scheme Financial Vehicle will enter contracts with prospective new generators and storage providers who tender for a FERM contract. ASL has appointed Equity Trustees Limited to this role.