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. 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 (ESOO) it must provide the Australian Energy Regulator (AER) with a reliability instrument request.
T-3 Reliability Instrument
On 22 October 2024, the AER made a T-3 Reliability Instrument for Victoria from 1 December 2027 to 31 March 2028 inclusive.
The T-3 Reliability instrument applies to the Victoria region of the NEM for the trading intervals between 3:00 pm and 9:00 pm Eastern Standard Time, each working weekday during the period 1 December 2027 to 31 March 2028 inclusive. For clarity, this means the trading intervals occurring between the periods ending 3:05 pm and 9:00 pm inclusive. The size of the forecast reliability gap is 130 megawatts (MW). AEMO’s one-in-two-year peak demand forecast for the forecast reliability gap period is 10,303 MW (reported on a 50% Probability of Exceedance [POE], ‘as generated’ basis).
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 Victoria the MLO generators are EnergyAustralia, AGL and Snowy Hydro. The MLO begins on 29 October 2024.