The Retailer Reliability Obligation (RRO) is designed to support reliability in the National Electricity Market (NEM). In particular it encourages retailers, and some large energy users, to establish contracts for their share of demand for a prescribed period. The RRO can be triggered if the Australian Energy Market Operator (AEMO) identifies a reliability gap in a region of the NEM as part of its Electricity Statement of Opportunities. The South Australia Minister also has the power to do this (under NEL Part 7A 19B (1)) if it appears to the Minister on reasonable grounds that there is real risk that the supply of electricity in all or part of South Australia may be disrupted to a significant degree on 1 or more occasions during a period in the instrument.
On 9 January 2020, the South Australia Minister for Energy and Mining triggered the RRO in South Australia for the first quarter of 2022.
Under South Australia’s declaration, the details of the prescribed period are:
- each weekday from 10 January 2022 – 18 March 2022 for the trading periods between 3pm and 9pm EST
Before 1 July 2022, the Minister may make a T-3 reliability instrument at least 15 months before the start of the specified period, after 1 July 2022 the Minister can only make a T-3 reliability instrument three years before the specified period.
If a T-1 reliability instrument is requested by AEMO and made by the AER later this year, which is not a role the South Australian Minister is able to do, retailers in South Australia will be obligated to establish contracts and report the details to the AER.
Market Liquidity Obligation
The Market Liquidity Obligation (MLO) is a market making requirement designed to facilitate transparency and liquidity in the trading of electricity futures contracts relating to a forecast reliability gap. The MLO operates between T-3 and T-1 when the Retailer Reliability Obligation (RRO) is triggered. MLO generators under the MLO are required to post bids and offers, with a maximum spread, on an approved exchange for standardised products that cover the period of the gap.
In South Australia the MLO generators are AGL, Origin and Engie. The MLO began on 7 February 2020.