The Australian Energy Regulator (AER) has, for the first time, approved a request to trigger the Retailer Reliability Obligation.

The Australian Energy Market Operator (AEMO) has identified a predicted capacity shortfall of 154MW in New South Wales in early 2024. This led it to request permission to activate the Retailer Reliability Obligation (RRO), which requires retailers ensure sufficient contractual arrangements are in place to maintain reliable supplies.

The Australian Energy Regulator (AER) has approved the RRO trigger, giving the green light three years ahead of the forecast supply shortfall in an effort to provide retailers sufficient warning of their obligations. 

The approval applies to January and February 2024, between 3 pm and 8 pm each day, when demand for electricity is expected to be highest and solar output drops. 

“Triggering the RRO then signals that liable entities in New South Wales should make prudent contracting decisions, taking in to account the potential risk identified in the reliability forecast and reliability instrument to purchase appropriate levels of electricity market contracts to cover their share of customer demand,” the AER said in an announcement.

It marks the first time the Retailer Reliability Obligation has been triggered since it was introduced as part of a package of reforms by the COAG Energy Council in mid-2019.