Australia's Stricter Interim Reliability Measure Lacks Stakeholder Support for Extension

The Australian Energy Market Commission has proposed extending the Interim Reliability Measure — a reliability standard significantly tighter than the established Reliability Standard — to 2028, despite a majority of industry stakeholders including energy consumers, retailers and producers opposing the extension. IEEFA warns that the measure's inclusion in the Electricity Statement of Opportunities reporting could produce alarmist headlines that misrepresent the true state of grid reliability.

The Australian Energy Market Operator's Electricity Statement of Opportunities reports on whether each region of the National Electricity Market is expected to meet the Reliability Standard, which limits expected unserved energy to 0.002% of annual demand — equivalent to roughly seven to ten minutes of outages across the market per year. The Interim Reliability Measure is significantly more stringent, targeting 0.0006% unserved energy, or approximately two to three minutes of equivalent outages. AEMO data show that 95.6% of blackouts between FY2009 and FY2018 were caused by network failures such as downed poles, with only 0.3% attributable to generation or capacity shortfalls.

Of eight submissions received on the AEMC's draft recommendation to extend the IRM to the Retailer Reliability Obligation to 2028, five opposed the extension and one was neutral. Only AEMO supported extension in the second round of submissions. The Australian Energy Council stated it remained unconvinced the IRM had delivered any benefits. The Reliability Panel's own review concluded that the IRM at 0.0006% is significantly tighter than a reliability level consistent with consumers' willingness to pay. Despite this, AEMC has proposed fast-tracking the draft rule, citing adequate public consultation.

IEEFA recommends that the established Reliability Standard — not the IRM — be the primary metric in ESOO reporting and in decisions by market planners and energy ministers. A central scenario from the 2023 ESOO shows that any New South Wales reliability gap following Eraring Power Station's closure in August 2025 would be approximately 191 MW in 2025-26, a small fraction of the 2,880 MW Eraring capacity, which could be addressed through targeted storage additions or demand response. IEEFA warns against using the IRM's tighter threshold to justify keeping Eraring open or making major market interventions without sufficient evidential basis.

Key figure — 191 MW — forecast reliability gap in New South Wales in 2025-26 under a central scenario after Eraring Power Station closes, compared with the station's full 2,880 MW capacity.