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Energy Ministers agree to final package of Stage 2 Reliability and Supply Adequacy reforms

On 8 December 2023, Energy Ministers agreed to progress Stage 2 of the East Coast Gas Market Reliability and Supply Adequacy (RSA) reforms. These reforms will support a more secure, resilient and flexible east coast gas market.

The Stage 2 RSA reforms will provide the Australian Energy Market Operator (AEMO) and market participants with more effective tools to monitor, communicate and respond to threats. They will also provide more guidance on how AEMO will use its new functions.

Energy Ministers agreed to progress the following measures:

  • A reliability standard that can be used to objectively identify reliability and supply adequacy threats, and guide responses to such threats.
  • Additional monitoring and communication tools that can be used to support more timely and efficient responses by market participants to any emerging threats. These include:
    • a short‑term and medium-term projected assessment of system adequacy
    • an advance notice of closure requirement for gas supply infrastructure
    • an objective threat signalling mechanism.
  • Additional reliability and supply adequacy management tools for AEMO. These include:
    • a supplier of last resort mechanism
    • an administered demand response mechanism, that will leverage AEMO’s existing trading functions and enable it to more effectively manage threats in the absence of timely market responses.
  • Improved alignment of the RSA Framework with the Gas Statement of Opportunities and Victorian Gas Planning Report and, where appropriate, the National Electricity Market forecasting tools.

Energy Ministers agreed not to proceed with the RSA contracting obligation reform at this time. However, they reserved the right to revisit the proposal should forecast supply shortfall risks persist in the future.

Officials will now prepare rule change requests for submission to the Australian Energy Market Commission (AEMC). Additionally, Energy Ministers have agreed to request AEMO to conduct an assessment and trial of a short- and medium‑term PASA. This will inform the design of a PASA rule.

Following submission of the rule change requests, the AEMC will undertake stakeholder consultation as part of the detailed design and development of the rule changes. This will allow it to enact the agreed measures, in accordance with normal rule change processes.

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Stage 2 RSA framework reforms