Throughout the year, when the grid’s available electricity supply cannot meet the forecast demand to maintain power system reliability, AEMO may request for emergency electricity reserves to be made available to the grid. Examples include during bushfires, heatwaves etc.
When this call is made, emergency sources such as generation (generators/batteries) or demand response* are made available to increase the grid stability in that region during peak demand.
Demand response is the term used when large commercial users reduce their load or shut down power, enabling an increase in the electricity supply for that region, that are otherwise not available in the market.
This AEMO intervention mechanism is known as the Reliability and Emergency Reserve Trader (RERT) under the National Electricity Rules (NER). AEMO uses RERT as one of a number of mechanism in the event that a critical shortfall in reserves is forecast ₁
When the emergency mechanism is activated, there are costs involved in administering the RERT process, and costs to compensate the large energy users who partake in the response.
These RERT costs are passed on by AEMO to retailers, these charges then flow on to those customers who consumed electricity in that region, during that time. Due to these RERT events, many commercial and industrial electricity users have received invoices with these additional charges listed.
Capacity or fixed charge: This payment is for contracted participants to guarantee they are available should AEMO need to stabilise the power system.
Activation or variable charge: This charge is applied when an event occurs and the service is triggered. AMEO has a full list of events on their website.
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