The Reliability Panel (Panel) has completed its review of the reliability standard and reliability settings to apply in the national electricity market (NEM) from 1 July 2020. We are required to assess the reliability standard and settings every four years. The Panel recommends keeping the current reliability standard and reliability settings unchanged as they remain appropriate to support reliability in the NEM.
This final report sets out the Panel’s review of and recommendations regarding the:
• Reliability standard which expresses the level of reliability sought from the NEM’s generation and transmission inter-connector assets.
• Reliability settings which protect the long term integrity of the market by limiting the extent to which wholesale prices can rise and fall, to limit market participants’ exposure to prices that could threaten the financial viability of a prudent market participant. They are set to allow investment sufficient to achieve the reliability standard.
The settings comprise:
- The market price cap which imposes an upper limit on temporary high prices in the wholesale market.
- The cumulative price threshold which imposes a limit on sustained high prices in the wholesale market.
- The administered price cap which is the ‘default’ price cap that applies when the cumulative price threshold is exceeded.
- The market floor price which imposes a negative limit on prices in the wholesale market.