Supplementary Reserve Capacity

Supplementary Reserve Capacity (SRC) will be procured by AEMO if, at any time after the day that is six months before the start of a Capacity Year, it determines that insufficient capacity is available to satisfy demand.

AEMO may call for tenders or negotiate directly with potential suppliers of supplementary reserve capacity. This can be provided by load reduction (where the load is not already associated with a Demand Side Programme) or generation services that are not registered facilities or do not hold Capacity Credits for the relevant Reserve Capacity Cycle.

In accordance with clause 4.24 of the Wholesale Electricity Market (WEM) Rules, the SRC process has been run twice in the WEM to cover forecast shortfalls over the short-term during the 2008-09 and 2022-23 summer periods. The required SRC of 120 MW was procured through contracts for 2008-09 and a total of 96.1 MW of SRC was contracted for 2022-23.

On 22 November 2023, AEMO concluded the formal tender process for the 2023-24 Supplementary Reserve Capacity process (SRC).

As of 1 December 2023, AEMO has contracted 116.6 MW of supplementary capacity with the following SRC providers:

• Starling Energy
• AER Retail
• Water Corporation
• Synergy
• Enel X

The contracted quantity is a combination of load reduction and energy producing system services.

AEMO is continuing procurement discussions with other potential SRC providers.

Invitation to Tender for Supplementary Capacity – WEM (now closed)

The Australian Energy Market Operator (AEMO) procures Reserve Capacity each year to ensure that there is sufficient generation capacity in the South West Interconnected System (SWIS) during peak demand periods.

Several changes and risks to supply have been identified since the publication of the 2022 WEM Electricity Statement of Opportunities in June 2022. This includes project delays, a voluntary capacity reduction for Alcoa Wagerup, an expected increase in AEMO’s peak demand forecasts and an increase in contingency reserve to account for decreasing reliability in the SWIS. As such, AEMO commenced the steps to procure up to 326 MW of anticipated shortfall of capacity between 1 December 2023 to 1 April 2024 in line with clause 4.24 of the WEM Rules.

AEMO is progressing the SRC process , with key activities outlined below:

AEMO sought tenders from providers capable of generation or load reduction which met the requirements of Eligible Services in line with clause 4.24.3 of the WEM Rules. This service is to be provided no earlier than 1 December 2023 and is to conclude by 1 April 2024.

Each Eligible Service must be available during the hours of 3:30 PM to 8:30 PM AWST in blocks of no less than 2 hours and must provide at least 1 MW of supplementary capacity. AEMO may procure this service from one or more providers, following evaluation of the submissions in line with AEMO’s internal procurement policy.

AEMO hosted an industry forum covering the requirements of the SRC process for the 2023-24 Capacity Year on 4 August 2023.

The Eligible Service must be available to be activated (if required) over a period of no longer than 16 weeks commencing on or after 1 December 2023 and ending on or before 1 April 2024.

The maximum contract value per hour of availability that will be accepted by AEMO for any Supplementary Capacity Contract is $ 1,661.12 per MW per hour. The Supplementary Capacity is expected to be required for no more than 48 hours throughout the period. 

For assistance, please contact the Reserve Capacity (WA) team at wa.capacity@aemo.com.au.

Western Power enquiries must be directed to network.access@westernpower.com.au and cc wa.capacity@aemo.com.au.