Consultation on Stage 2 of the Reliability and Supply Adequacy Framework for the east coast gas market

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On 12 August 2022, Energy Ministers agreed to take a range of actions to support a more secure, resilient and flexible east coast gas market, including introducing a fit for purpose Reliability and Supply Adequacy framework.

Stage 1 of the framework, which came into effect earlier this year, expanded the Australian Energy Market Operator’s (AEMO) powers under the National Gas Law to better manage gas supply adequacy and reliability risks ahead of winter 2023 and beyond.

Stage 2 of the reforms builds on stage 1 by focusing on those elements of the framework which will help guide how AEMO uses its new powers and facilitate timely market-led responses to future threats by providing market participants with greater predictability and transparency.

Energy Senior Officials recently undertook consultations with the public release of a consultation paper to seek stakeholder feedback on the need for, and high-level design options on, potential measures for inclusion as part of stage 2 of the framework. The reforms proposals canvassed included:

  • a reliability standard
  • additional monitoring and communication tools analogous to those in the National Electricity Market (NEM), in particular, projected assessment of system adequacy (PASA), and a notice of closure requirements for certain types of gas infrastructure
  • targeted reliability and supply adequacy management tools, including:
    • a reliability and supply adequacy contracting obligation on gas retailers and gas-powered generators
    • an administered demand response mechanism
    • a supplier of last resort mechanism.

The consultation period ran for six weeks, with the period for submissions closing on Thursday 13 July 2023.

A virtual information session for registered attendees was held on Thursday 15 June 2023.

Officials are currently considering feedback received through the consultation process to help inform recommendations to Energy Ministers (currently anticipated before the end of 2023) on whether any additional elements should be included in the framework. If Energy Ministers agree to the inclusion of any additional elements, further work will be undertaken to design, test and consult on the recommended elements as part of implementing the reforms.


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