The Australian Energy Regulator (AER) has today advised that the current T-1 reliability instrument for South Australia (T-1 Instrument) made under the Retailer Reliability Obligation (RRO) will remain in place. Liable entities in South Australia should continue working towards fulfilling their obligations under the T-1 Instrument and report their net contract position to the AER by 31 July.
In February 2023 the Australian Energy Market Operator (AEMO) updated the 2022 Electricity Statement of Opportunities (ESOO), to advise that the reliability gap that is the subject of the T-1 Instrument is no longer forecast due to increases in projected supply in South Australia.
The AER has considered the current RRO framework, and there is no ability for the AER to revoke or amend a T-1 reliability instrument once made. Consequently, the T-1 Instrument for South Australia for the period 8 January to 29 February 2024 will remain in place.
Background
The RRO is designed to support reliability in the National Electricity Market (NEM) by requiring companies to hold contracts or invest directly in generation or demand response.
If AEMO identifies a reliability gap in a region of the NEM as part of its ESOO, it must provide the AER with a reliability instrument request, which we review in accordance with the decision-making criteria set out in the National Electricity Rules.
In August 2022, AEMO published the 2022 ESOO which forecast a reliability gap in South Australia for early 2024. The T-3 reliability instrument for this forecast reliability gap period was previously made by the South Australian Minister on 7 January 2021.
Following review and consultation, the AER made and published the T-1 Instrument in October 2022, which applies for the period of 8 January to 29 February 2024. The T-1 Instrument requires liable entities in South Australia to hold a sufficient net contract position (NCP) for the forecast reliability gap on 6 January 2023 and to report their NCP as at that date, to the AER.
On 21 February 2023, AEMO published the ESOO Update in response to material changes to available capacity in the NEM, including those relating to South Australia, as outlined above.