Commencing in 2019, the Retailer Reliability Obligation (RRO) requires energy retailers (plus some large energy users) to support reliability in the National Electricity Market (NEM) by holding contracts or investing directly in generation/demand response.
The RRO is exercised through two instruments:
RRO T-3 Instrument
- Triggered 3 years and 3 months before an identified gap to the reliability standard
- AEMO forecasts breaches to the the reliability standard as part of their Long Term Projected Assessment of System Adequacy (LT PASA) modelling which they publish in their annual Electricity Statement of Opportunities (ESOO) report
- If a breach is forecast, retailers need to increase their contracting with existing generators and/or unlock new investment
RRO T-1 Instrument
- Triggered 1 year and 3 months before an identified gap
- AEMO forecasts breaches to the reliability standard as part of their Medium Term Projected Assessment of System Adequacy (MT PASA) modelling
- If a breach of the standard is forecast, liable entities must report their net contract position to the Australian Energy Regulator (AER) for assessment
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