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 31 October 2023 the AER made a T-3 Reliability Instrument for New South Wales from 1 December 2026 to 31 March 2027 inclusive.
The T-3 Reliability instrument applies to the New South Wales region of the NEM for the trading intervals between 3 pm and 10 pm Eastern Standard Time, each working weekday during the period 1 December 2026 to 31 March 2027 inclusive. The size of the forecast reliability gap is 250 MW. AEMO's one-in-two year peak demand forecast for the forecast reliability gap period is 13,890 MW (reported on a 50% Probability of Exceedance, ‘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 New South Wales the MLO generators are EnergyAustralia, AGL and Snowy Hydro. The MLO begins on 7 November 2023.