Retailer Reliability Obligation

The Australian Energy Regulator (AER) is supporting improving reliability in the NEM by implementing the Retailer Reliability Obligation (RRO) alongside the ESB. At the 26 October 2018 COAG Energy Council (COAG EC) meeting, Ministers agreed that the Energy Security Board (ESB) will progress development of draft National Electricity Law amendments that would give effect to a Retailer Reliability Obligation (the Obligation).

The ESB was tasked to develop the National Electricity Rules (the Rules) necessary to implement the Obligation. The draft Rules were published for stakeholder consultation on 8 March 2019. A revised rules package was released on 9 May 2019. The final Rules are proposed to be in place by 1 July 2019.

Guidelines to be developed

As set out in the Rules, the AER is responsible for developing a number of Guidelines on certain aspects of the RRO. Due to timing constraints the Rules specify that the AER will develop a number of interim guidelines which will be in place for one to two years. During this time the AER will run a full consultation process to develop final guidelines. The AER must develop the following guidelines:

The Reliability Instrument Guideline, explains how the AER has regard to the criteria in the rules when assessing whether or not to make a reliability instrument following a request from AEMO, how the AER will consult with stakeholders when deciding on a reliability instrument request and defines what information AEMO must provide the AER as part of a reliability instrument request.

The Market Liquidity Obligation (MLO) Guideline sets out the obligation of generators in the event of a trigger. It addresses:

  • the methodology and process for determining market generator capacity
  • the allocation of generator capacity amongst generator groups
  • the information generators are required to provide to the AER
  • the process for registering and appointing MLO nominees
  • the criteria for selecting the MLO exchange
  • what MLO products the AER approves
  • how the AER will monitor compliance, and
  • how the MLO Register will be established and maintained.

The Contracts and Firmness Guideline provides guidance on:

  • the types of contracts
  • the firmness methodology and how to apply it
  • the criteria for approving bespoke firmness methodologies
  • how adjustments to net contract position will be determined
  • the reporting process for obligated parties, and
  • how the AER will assess net contract position against a liable entity’s scaled demand.

The Forecasting Best Practice Guideline, outlines the forecasting process expected of AEMO. When assessing a reliability instrument request we will consider whether AEMO has followed our guideline.

The Opt-in Guideline will set out the arrangements for large consumers to opt-in to participating in the RRO themselves instead of through their retailer. The guidelines will:

  • set out the process for establishing and maintaining the opt-in register
  • the information to be included in the register
  • the process for registration and deregistration as an opt-in customer, and
  • how the AER Opt-in Guidelines will work with the AEMO Opt-in Procedures if AEMO chooses to make one.

The Reliability Compliance Procedures and Guideline will set out how the AER will assess compliance for the RRO.

Timetable for guideline development

Guideline Consultation on interim guideline Interim guideline published Final guideline published

Reliability Instrument Guideline

31 May 2019

31 July 2019

31 July 2020

Market Liquidity Obligation Guideline

24 May 2019

31 August 2019 31 December 2020

Contracts and Firmness Guideline

14 June 2019

31 August 2019 31 December 2020
Forecasting Best Practice Guideline

31 May 2019

30 September 2019

30 November 2020

Opt-in Guideline

Late 2019/early 2020 TBC No interim arrangements

30 June 2020

Reliability Compliance Procedures and Guideline Consultation mid 2020 No interim arrangements 31 December 2020