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Explaining electricity reserve levels

3 min

Each year, AEMO works with the government and industry to secure adequate supply for the network and prepare for the summer ahead.

AEMO has this week published its 2019-20 Summer Readiness report which highlights the plans and actions both AEMO, the industry and government jurisdictions have taken to prepare Australia’s power system for the summer months.

The plan focuses on having appropriate resources available for AEMO, as the system operator, to call on to ensure supply is adequate to meet consumers’ energy requirements and power system security can be maintained at all times, managing frequency, voltage, system strength and inertia.

However, unplanned events can impact available supply, which may cause an increased risk of Lack of Reserve (LOR) conditions. This includes high demand, extreme weather events, natural disasters, along with generation outages and faults on the transmission network. 

As the national energy market operator, it is AEMO’s role to meet energy reliability standards for all Australians. 

We do this proactively by establishing a number of processes and arrangement to mitigate risk to energy supply during high demand conditions. 

This includes issuing LOR industry notices to encourage increased electricity generation to minimise the risk of limited reserves causing physical damage to parts of the power system and long-term outages to residents and businesses.

Here’s how it works:

AEMO has consulted with the Victorian Government to identify and secure 125 MW of additional off-market reserves (generation and demand management) under the Reliability and Emergency Trader (RERT) mechanism to meet the reliability standard.

Further, AEMO will seek to enter into additional 1,500 MW of short and medium notice RERT panel agreements, which allow AEMO to more rapidly enter into reserve contracts if required, with no costs incurred unless these reserves are activated.

This initiative enables AEMO to have sufficient resources to manage potential high-risk scenarios that typically occur in summer.

For all the latest news, insights and analysis from the Australian energy industry subscribe to our fortnightly newsletter and download the new Energy Live app on Apple and Android.

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