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Retailer Reliability Obligation Final Rules Package

Yesterday the Energy Security Board (ESB) provided an overview of the final package of proposed amendments to the National Electricity Rules (NER) (final Rules) to implement the Retailer Reliability Obligation (RRO or the Obligation) and takes into account stakeholder feedback. It should be noted that South Australia is undertaking a separate process in relation to how the national framework may have to be amended or altered to take into account the framework that will apply in South Australia (including that the South Australian Minister may trigger the RRO sooner than under the national framework).

The RRO originated from the National Energy Guarantee. As outlined in the ESB’s Final Rules Package, the RRO builds on existing spot and financial market arrangements in the National Electricity Market (NEM) to facilitate investment in dispatchable capacity and demand response. It is designed to incentivise retailers, on behalf of their customers, to support the reliability of the power system through their contracting and investment decisions. The Obligation has three key drivers that will work together to lower electricity prices, namely:

  • increased contracting unlocking new investment
  • increased contracting in deeper and more liquid contract markets to reduce the level and volatility of spot prices, and
  • increased voluntary demand response.

The RRO is scheduled to come into effect on 1 July 2019. Large customers who have consumption greater than 50 GWh/annum will have the option to opt-in, thereby taking the responsibility away from their retailer.

If you would like to know more about the potential impact that the RRO may have, please contact Edge Energy Services on 07 3905 9220 or 1800 334 336.