The Australian Energy Regulator (AER) has today published the Interim Forecasting Best Practice Guidelines, which form part of the AER’s functions for the Retailer Reliability Obligation (RRO).
The RRO may be triggered if the Australian Electricity Market Operator’s (AEMO) annual forecast identifies a reliability gap in three years’ time. The obligations imposed on liable entities through the operation of the RRO increase the importance of forecasting best practices and processes.
The Interim Forecasting Best Practice Guidelines seek to support and to encourage these best practices, particularly in relation to the transparency and quality of AEMO reliability forecasts.
The AER’s involvement in the forecasting process is based on the Interim Forecasting Best Practice Guidelines. While not technically prescriptive, these Guidelines translate and adapt the forecasting best practice principles in the National Electricity Rules (NER) into actions to be undertaken by AEMO.
The AER considers that market participants’ confidence in AEMO forecasts and forecasting processes should improve where AEMO produces its reliability forecasts in accordance with the Interim Forecasting Best Practice Guidelines.
As set out in the NER, the Interim Forecasting Best Practice Guidelines will be superseded by Final Forecasting Best Practice Guidelines. The final version of these Guidelines will be consulted upon and developed in 2020, and be published by 30 November 2020.