COAG Consultation Regulation Impact Statement – COAG Energy Council
On 30 November 2018, the Energy Security Board, on behalf of the Council of Australian Governments (COAG) Energy Council released an impact assessment of the Retailer Reliability Obligation (RRO) for the National Electricity Market (NEM). This document, along with the Consultation on Retailer Reliability Obligation Legislative Amendments released by the Energy Security Board and the previous COAG Consultation RIS on the National Energy Guarantee released on 29 June 2018, are collectively considered by the OBPR as meeting the COAG Consultation RIS requirements for the RRO.
Consultation on the RRO Legislative Amendments closed on 22 November 2018 and consultation on the RRO impact assessment closes on 12 December 2018.
The RRO builds on existing spot and financial market arrangements in the electricity market to facilitate investment in dispatchable capacity. It is designed to incentivise retailers, on behalf of their customers, to support the reliability of the power system through their contracting and investment in resources. The RRO does this by requiring electricity retailers to demonstrate they have entered into sufficient contracts for dispatchable capacity (including demand response) to cover their share of system peak demand at the time of the gap between demand and supply. The obligation would be triggered if there is a material gap between forecast demand and supply three years out from the period in which the gap is forecast.