The Reliability and Emergency Reserve Trader (RERT)
In Australia, if there is a threat to the reliability of our power system, the Australian Energy Market Operator (AEMO) can step in to maintain or restore a stable operating state.
One-way AEMO does this is through the Reliability and Reserve Emergency Trader (RERT), a two-way contract it holds with large commercial energy users. Under RERT contracts, AEMO may request large commercial users who are contracted in the RERT program, to significantly reduce demand or shut down, if the market does not have enough capacity to meet forecast demand, such as during extreme weather events. Large energy users do this in exchange for payment.
Participants in the RERT are deemed eligible based on a range of criteria, including having the flexibility to change their operations in order to reduce energy consumption during times of peak-demand. Most large commercial energy users opt to participate in the RERT via an intermediary, such as Origin.
Recent RERT activation
Early in 2023, Australia’s National Energy Market (NEM) was at risk of supply shortfalls, due to high temperatures and the impact this has on energy demand, coupled with several large generators offline for maintenance. These events placed significant pressure on the grid and posed risks to reliability.
On 3 February 2023, AEMO activated 21 MWs of electricity reserves in Queensland under the RERT.
Helping restore balance in power supply and demand
During this RERT event, Origin successfully engaged participants, acting on instructions from AEMO to dispatch reserve capacity. Through our virtual power plant, our team liaised with our Queensland based RERT customers informing them of market notices, changes to weather and grid conditions, and passing on regular updates on the likelihood of a RERT event and its potential duration.
RERT participants can support the energy market to help avoid prolonged high prices and outages. If they participate in a RERT event, they receive a payment from AEMO and a reduction in direction charges proportionate to their participation. This compensation is provided by AEMO because their role, as RERT participants, is essential in allowing the RERT mechanism to work and ensuring the on-going security and stability of Australia’s power system.
Customers power down and earn RERT payments
During the recent RERT event on 3 February, Origin Zero customers delivered all of the reserve electricity activated by AEMO and were compensated accordingly for powering down for 2 hours (the complete duration of the RERT event).
The RERT is only used for emergencies
While we’re experiencing more extreme adverse events that affect our electricity system, it’s important to note the RERT is only used in emergency situations and when AEMO deems it necessary. RERT participants are given notice in line with their contracted operational parameters, and as the program is an “opt-in” mechanism, participants have the freedom to participate after assessing their operational constraints.
There are differing mechanisms and other ways large businesses can be rewarded for reducing demand and helping to increase system reliability, besides the RERT.
Have a chat to your Origin Zero team today to discuss the different options available for your business.
