On 28 November 2024, the AEMC published a consultation paper in response to a rule change request from Hon Tom Koutsantonis MP, Minister for Energy and Mining in South Australia (the Minister), seeking a jurisdictional derogation in South Australia (SA).
The Australian Energy Market Operator's (AEMO’s) 2024 Electricity Statement of Opportunities (ESOO) projected a reliability shortfall of 200MW in South Australia against the interim reliability measure (IRM) for the 2024-25 period. The rule change request asserts the jurisdictional derogation would allow AEMO to consider two generating plants owned by Engie (Snuggery and Port Lincoln) for interim reliability reserve (IRR) in the 2024/25 summer.
The AER made a submission to the draft report on 20 December 2024.
The AER supports the proposed derogation to manage reliability risks by allowing the contracting of required IRR in this limited instance. This is subject to the derogation being limited to assisting AEMO to address the reliability shortfall in South Australia in January and February 2025 only.
The AER’s submission sets out its assessment of the risks for and against the proposal. Overall, the AER considers the increased risk of load shedding would be a suboptimal outcome for consumers, particularly if this risk coincides with extreme weather as the SA Government and AEMC have identified.