Type
Communications
Sector
Electricity
Segment
Wholesale
Issue date

The AER has released guidance for electricity market participants in relation to the use of auto-bidding software, as well as for the engagement of third-party service providers. 

The AER has observed an increase in automated bidding by market participants in recent years, as well increased reliance on third party providers to meet compliance obligations. Automated bidding, also known as ‘auto-bidding’, typically involves the use of a computer algorithm with a pre-defined set of instructions or rules which automatically determines, with little or no human intervention, one or more parameters of a bid (such as whether to initiate a bid, timing, price or capacity) or how to manage the bid after submission to market. 

The AER recognises the numerous benefits that using auto-bidding software can make to the market, however we consider that without appropriate safeguards in place, they can also give rise to an increased risk of non-compliance with the National Electricity Rules (NER).

Our new Compliance Bulletin seeks to address this risk by providing best practice expectations to assist market participants in complying with relevant NER obligations when making bids or rebids through an auto-bidder, or when using a third-party service provider.

The Compliance Bulletin sets out:

  • key expectations for market participants and third-party providers in relation to the use of auto-bidding software
  • the due diligence process market participants should undertake when engaging with third-party service providers and
  • suggestions related to the provision of contemporaneous records for automated rebids.

We encourage market participants and third-party service providers to review their practices against the guidance set out in the Compliance Bulletin and update them as appropriate.

Background

The guidance set out in the Compliance Bulletin was first considered as part of proposed updates to the AER’s Rebidding and Technical Parameters Guideline (Guideline). 

Given the decision to delay updates to the Guideline, the AER has decided to publish this guidance separately.

Contact

Any queries related to the Compliance Bulletin or the AER’s Rebidding and Technical Parameters Guideline can be emailed to AERComplianceataer [dot] gov [dot] au (AERCompliance[at]aer[dot]gov[dot]au).