Bills

National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr HUGHES (Giles) (16:51): I have to remember where I was. I think I was talking about pumped hydro in Upper Spencer Gulf and how, under the previous federal government, the program Underwriting New Generation Investments (UNGI) shortlisted those projects in Upper Spencer Gulf. But, as was typical under that federal government, no money was provided through that program for a range of projects.

It is interesting to reflect that when you do look at pumped hydro, which is something we seem to have moved away from—I think there might be one or two projects in Queensland that are going ahead—the Australian National University did an audit of potential sites throughout Australia and identified 22,000 potential sites when it came to pumped hydro. As I said, any project—and there are a variety of options out there; we have a whole range of variables—any of them, you need to look at the base level cost of electricity when deciding what is viable, what is not and what fits.

You have some failure there but in a related way the Retailer Reliability Obligation bill was itself the result of divisions in the Coalition of climate change, divisions that persist to this day despite the overwhelming evidence that the electorate has moved on and despite the fact that they were smashed in blue ribbon city seats. It is amazing.

The Retailer Reliability Obligation was initially part of the proposed National Energy Guarantee, which was floated in 2018. The inability of the Liberal and National MPs to agree amongst themselves resulted in the obligation being the residue after the emissions reduction aspect of the National Energy Guarantee was removed. Essentially, it was gutted policy and we had 10 years of absolute failure in this area.

It is heartening to see the current energy ministers' forum that brings together the commonwealth, states and territories, which has been reinvigorated by the federal Labor government and has no hesitation about acting in the best interests of the planet and of generations of Australians to come.

As I stated earlier in this speech, it is good to see that it is not just the Labor states that are getting heavily involved. Tasmania and New South Wales are very keen to participate, and both states are doing interesting things when it comes to renewables and storage in their particular jurisdictions.

Energy ministers have agreed to introduce an emissions objective into the national energy objectives. The objectives are the basis for the laws and rules, so emissions reduction will be at the heart of the energy system, which is a major step forward. Energy ministers have agreed to form a partnership because as they said:

…the time is right to work together on a new agreement to set the vision for Australia's energy sector transformation to net zero.

What a contrast that attitude is to the lost decade on the colleagues in Canberra of those opposite.

I am not heavy on the opposition when it comes to some of this stuff, because I think most of them actually agree that renewables and storage and a range of other measures are the way forward. I remember very early on in the term of the Marshall government, after listening to the then energy minister speaking up at a conference in Port Augusta that, in many respects, there was a bit of bipartisan support in this state and should be used to our advantage. I will go so far as to say it was a significant bipartisan approach. There were obviously some differences, and there were always going to be those niggling criticisms and other criticisms that we all make every now and again.

When we were talking about this particular approach in the past, I mentioned the Tesla virtual power plant that was an initiative of the Weatherill government, which the Marshall government picked up. I think it is time that we had a look at that particular program, especially when it comes to Housing Trust properties. There was going to be an aim of ensuring people on low incomes in Housing Trust properties were going to benefit.

The numbers that were rolled out in the four years of the previous government were very limited, but I just wonder if that is going to improve to any significant degree, because I think there are some issues with the program when it comes to Housing Trust properties in a number of our regional communities and, I dare say, in the metropolitan area as well. So it is probably time to have a look at that program and see how we can improve it.

I said back then that South Australia had an incredibly positive future in the energy sector, and indeed we do. We are now at the forefront of the global development of a clean, green hydrogen industry. I am exceptionally proud of the role that Whyalla and the electorate of Giles will play in this state-shaping endeavour.

The Retailer Reliability Obligation aims to produce new investments in new generation that is clean and green and reliable. We are not waiting for that here. We are getting on with it. We are building a new generation, clean hydrogen-powered generator in Whyalla that will work in harmony with renewables. It will act as a spur for more investment in grid-scale wind and solar. It also has the potential to open the gate to other hydrogen proposals.

Both the previous government and ourselves are committed to the hydrogen hub that has been identified for Whyalla. We are guaranteed to see the state government hydrogen plant. When it comes to the hub, I have been around for a long time and I know that you do not have a project until you have financial closure. I know that the scale of some of the projects that are being looked at are incredibly impressive, but there are 147 hydrogen proposals in Australia, not counting the hydrogen proposals globally.

South Australia clearly has some advantages and we need to make the most that we can of those advantages. That is why the hydrogen power plant is interesting because the companies I have been speaking to see that tangible initiative on the part of the government as a potential spur to other investment and to investment from the private sector, so it could be very promising.

It is interesting to reflect—I remember back in 2014-early 2015, I did some work with the Melbourne Institute. We wrote to 50 companies to see if they might be interested in doing something or looking at hydrogen in Whyalla. I said I could secure half the money to look at it. At that time, even though some companies expressed some interest, there were no offers of tangible support so it went by the way, but it was great to see that the Weatherill government was the first government in the country to commit to a hydrogen role plan and fully recognise the potential role that hydrogen could play in the future. This bill is obviously worthwhile supporting, and I commend the bill to the house, but I also remind the nation that South Australia will be racing ahead as we have always done in the energy area.

Ms HUTCHESSON (Waite) (17:00): I rise to speak in support of the National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill 2022. This bill is part of a suite of reforms in which South Australia acts as the lead legislature for the nation’s energy markets. The core reform being proposed in this bill is to provide the capability for a minister in a particular jurisdiction to declare what is known as a T-3 instrument; that is, a warning to the electricity market that a risk of a supply shortfall three years ahead has been identified and requires a response.

In this particular case, South Australia already provides for our minister to make such a declaration. This bill merely lets the other states catch up to us. This bill builds on amendments made in 2019 to the National Electricity (South Australia) Act 1996 which created the Retailer Reliability Obligation. Interestingly, when those amendments were debated in this place during the previous parliament, the member for West Torrens, who is now the Minister for Energy and Mining, made some prescient comments.

At that time, April 2019, the member said he could not understand why South Australia was the only jurisdiction which gave the relevant minister the power to make a T-3 instrument. He surmised that the then South Australian energy minister was probably acting on the excellent advice he received from his agencies, whom they both recognised as being exceptional. He went on to say:

I do not know why, and I still cannot understand why, other member states [of the National Electricity Market] did not wish to take that power for themselves as well. I think it is a very prudent thing to do…

So here we are, more than three years later, with all the other states asking us to legislate for them exactly what our minister recognised back then as the best course of action in administering the Retailer Reliability Obligation. But it should not come as a surprise to South Australia that our minister at the helm of energy regulation was way ahead of the pack.

Think back to the energy plan under the previous government from this side. Remember the Big Battery where the government incentivised the revolutionary concept of building a grid-scale battery to stabilise supply? Uninformed critics and critics who should have known better but did not, misunderstood the purpose of the battery. They labelled it the 'Big Banana'. They said it would be useless because it could only supply energy for a very brief period, but time proved the critics wrong.

The Big Battery, owned and operated by Neoen using Tesla equipment, has saved South Australians tens of millions of dollars in ancillary support costs. It has been so successful that it was increased in size from 100 megawatts (129 megawatt hours) to 150 megawatts (193.5 megawatt hours). The range of support services it provides has been broadened. Significantly, big batteries are being or have been installed across Australia and in many other countries. South Australia led the way.

Similarly, South Australia moved earlier than other states in identifying the opportunities of hydrogen, creating a road map with a vision that has led us to today’s Hydrogen Jobs Plan where we are at the cutting edge of this exciting technological change. We have led the way with renewables, with more than two thirds of supply from renewables last financial year. Often renewables provide ample supply to meet 100 per cent of demand. We are understood to be the first jurisdiction in the world where an electricity system of more than one gigawatt of demand has times where solar alone provides that level of capacity. Wind alone also meets the 100 per cent mark frequently, and wind combined with solar meets the mark for hours at a time.

It would take a degree of hubris to say that South Australia's achievements in energy leadership have not been without challenges but, being a progressive state, we have met those challenges and made reforms to strengthen our system. One need look no further back than 12 November last year, when storms whipped through South Australia causing two different but related major problems.

In one incident, the ElectraNet transmission tower south of Tailem Bend was toppled, causing the line to trip, effectively islanding most of South Australia from the rest of the National Electricity Market. This was a major disruption, yet the grid handled it and no customers lost power because of the lack of supply. Actually, the reverse was true: excessive supply was the issue, and it required careful interventions to curtail generation until the transmission line was repaired and ready to export South Australian renewable energy to Victoria.

The second stress on the system was not related to transmission. It was the widespread damage to the distribution network caused by falling trees and vegetation. This damage was an act of nature, unfortunately the type of extreme event we can expect to become more common because of climate change. It resulted in more than 500 wires being down and 163,000 customers losing power. I would like to take this opportunity to commend the crews of the State Emergency Service, the Country Fire Service and SA Power Networks for the extraordinary effort they made to clear roads and access and restore power to as many homes as quickly as possible.

My electorate of Waite was among the hardest hit areas, with many households experiencing blackouts for days. This caused a great deal of anxiety and stress for many residents; having no power, and no mobile phone coverage or internet due to no power, isolated many. This experience reminded many about the importance of communication, especially when you need up-to-date information about recovery. On one section of road in Upper Sturt alone the rebuild of the network took days, with 40 new Stobie poles and two kilometres of new wires within just a small section of Waite. It was a huge effort.

These were blackouts that could only have been avoided if billions of dollars had been spent on undergrounding powerlines, a cost that has been beyond reach in our sparsely populated state. As such, I encourage my community to consider the benefits of solar and battery systems, making sure they have the necessary equipment to continue to use the battery off grid. This is especially important in my own suburb of Upper Sturt, where we have no mains water and had to rely on buckets to flush the toilet and either generators or the kindness of neighbours to have hot shower—or even get a drink of water out of a tap.

I met recently with a local who works for Telstra to discuss what happened in the storm and why we were without internet and 4G for so long. He advised that for areas supported by towers in Coromandel Valley there was actual damage to some of the equipment, and it was not just the issue of there being no power. He did remind me that there are public telephone boxes that can continue to be used when the power goes out—something I had completely forgotten. He also suggested that having a satellite phone would be another way to ensure you can always stay connected. I thank him for his help and his information.

The length of the blackouts were minimised by the South Australian volunteer spirit, the professional response of our energy companies, our SES and CFS volunteers and councils working around the clock for days continuing to clear roads and driveways, SA Power Networks working hard to restore power, and community members out helping each other. My community was united.

The circumstances of those blackouts are very different from the risks in supply that this bill seeks to address; however, this experience is fresh in our minds and is a real reminder of the importance of reliability. Our homes, our businesses, our schools, our hospitals, our places of entertainment and more are all sites in our lives where we take a reliable energy supply for granted. However, we can only take it for granted if we know this system is as resilient as possible.

South Australia has led the way in improving resilience, and we are pleased to be able to help other states follow our lead. I commend the bill to the house.

Mr BROWN (Florey) (17:08): I rise to speak in support of the National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill 2022. This bill comes to the South Australian parliament after being proposed by the Energy Security Board and endorsed by the national energy ministers' forum.

Once again, South Australia acts as the lead legislator on energy laws and rules, and I would like to take this opportunity to thank the minister's office for providing me not only with a briefing opportunity but also with substantial information in putting together my contribution today. This bill builds on the Retailer Reliability Obligation, established in 2019, and brings other states in step with provisions already operating in this state. In a paper published for public consultation, the Energy Security Board highlighted three benefits it sees from the reforms in this bill. The board said that the amendments were designed to deliver the following policy outcomes:

to provide a supporting policy lever to address reliability concerns in the National Electricity Market;

to implement a nationally consistent framework by extending the current legislative framework in South Australia to the other jurisdictions; and

to leverage the existing Retailer Reliability Obligation framework, which is already well understood by market participants.

Under the existing Retailer Reliability Obligation mechanism, the Australian Energy Market Operator (AEMO) forecasts annually whether the reliability standard is likely to be met in each region of the National Electricity Market over the forthcoming 10 years. If a material gap is identified three years from the period in question, or what is called the T-3 point in energy market terminology, in all jurisdictions except South Australia, AEMO must apply to the Australian Energy Regulator (AER) to trigger the Retailer Reliability Obligation. Where a reliability instrument is made, liable entities are put on notice to enter into sufficient qualifying contracts to cover their share of a one-in-two-year peak demand.

A Market Liquidity Obligation placed on generators aims to ensure there are contracts available to smaller market customers by requiring certain generators in each region to make contracts available to the market. AEMO will also run a Voluntary Book Build mechanism to help liable entities secure contracts with new resources. If the market response is insufficient, AEMO can lodge a request with the AER to confirm a reliability gap one year out, and to declare a T-1 reliability instrument. Liable entities must then report their contract positions for the reliability gap period to the AER. If actual system peak demand exceeds an expected one-in-two-year peak demand, the AER will assess the compliance of liable entities and determine whether their share of load for the reliability gap period was covered by qualifying contracts.

The draft bill amends the T-3 trigger so that the relevant minister in a particular jurisdiction has the option to trigger a T-3 reliability instrument if it appears to the minister on reasonable grounds that there is a real risk that the supply of electricity will be disrupted to a significant degree during a specified period. This modification has applied in South Australia since the commencement of the Retailer Reliability Obligation.

Before making a T-3 reliability instrument, the minister must consult the Australian Energy Market Operator and the Australian Energy Regulator. This ministerial capability will replace the existing system in jurisdictions other than South Australia. In those jurisdictions, the Australian Energy Market Operator requests a T-3 reliability instrument with the Australian Energy Regulator assessing that request and issuing the instrument if it agrees it is necessary.

Having a minister make the instrument is simpler and more efficient in terms of timing, but the required consultation with AEMO and the AER means it cannot be done for spurious reasons. To date, six T-3 instruments have been triggered: four in South Australia and two in New South Wales. Of those six instruments, two of the South Australian and one of the New South Wales instruments were revoked prior to reaching the critical one-year-ahead stage. The remaining three instruments remain in effect. Only one—the South Australian T-3 instrument made in January 2021 and covering the summer of 2024—has reached the T-1 declaration point. In fact, on 24 October 2022 the AER declared a T-1 reliability instrument for South Australia covering the period 8 January to 29 February 2024 inclusive.

The T-1 reliability instrument applies to the South Australian region of the National Electricity Market for the trading intervals between 5pm and 9pm Eastern Standard Time each weekday during the designated period. AEMO's one-in-two-year peak demand forecast is 3,044 megawatts for the forecast reliability gap period, reported on a 50 per cent probability of exceedance on an as-generated basis. AEMO's request to the AER for the summer of 2024 stated that there was a risk of a gap of 230 megawatts to meet that forecast peak.

Liable entities are required to record their net contract position for each trading interval in the forecast reliability gap period as it is on the contract position day, which is 6 January 2023, or new entrant contract position day, which is 9 January 2024. The report must be provided to the AER by reporting day, which is 31 July 2023, except for new entrants.

Before declaring a T-1 instrument, the AER checks AEMO's assumptions and calculations. Data sets checked by the AER included capacity and output of photovoltaic systems—in other words, solar—outage rates for generators, behind-the-meter battery storage installed capacity, economic growth and population outlook, electrification, electric-vehicle uptake, inter-regional network losses, auxiliary reloads, demand-side participation and rates of unplanned outages on inter-regional transmission.

Among the data checked, AER took note of AEMO's 2023-24 forecast of 3,503 gigawatt hours of consumption in South Australia related to large industrial loads. This represented approximately 29.4 per cent of operational consumption. This large industrial load was also forecast to contribute 13.5 per cent to the maximum operational demand in the summer of 2023-24. Pleasingly, AEMO forecast that, and the AER accepted, South Australia was making gains through energy efficiency. Energy efficiency measures would cut 361 gigawatt hours from consumption, representing 3 per cent of operational demand.

AEMO and the AER also considered the expected availability of generators. Data checked against this availability consideration were:

the summer seasonal rating for existing generators and committed projects;

maximum capacity for existing generators and committed projects; and

firm capacity of existing thermal generators.

In making an assessment about a generation project and its expected available capacity at a given time, AEMO looks at advice provided to it by the owners of generation projects and five criteria that would confirm commitment of the project. These criteria are:

site acquisition;

contracts for major components;

planning and other approvals;

financing; and

construction.

In public consultation about the T-1 instrument for the summer of 2024, AEMO's assessment of the status of two projects in South Australia were challenged. Submissions from AGL Energy, the Energy Users Association of Australia (EUAA) and Shell Energy raised the issue of AEMO's assessment of the 123-megawatt Bolivar power station to be 'anticipated' rather than 'committed'. AGL Energy raised the same issue for its 250-megawatt Torrens Island battery.

However, the AER accepted the assessment of AEMO that, although these projects were well advanced, they did not meet the deadlines and criteria to be classified as committed. Understandably, these agencies must exercise caution in their assessments. It is quite clear that the process for making these reliability instruments is quite rigorous and well-defined, and that is exactly as it should be because of the importance of a reliable electricity supply to households, industry and business as well as in fairness to energy companies.

It is important to bear in mind that the penalties for transgressing reliability rules can be substantial. The Retailer Reliability Obligation created a civil penalty with amounts not exceeding, for either a natural person or a body corporate, $1 million for a breach relating to a reliability gap period and $10 million for a breach that relates to a second or subsequent reliability gap period.

If actual system peak demand exceeds an expected one-in-two-year peak demand, the AER will assess the compliance of liable entities and determine whether their share of load for the reliability gap period was covered by qualifying contracts. AEMO may commence procurement of emergency reserves at this point through the Reliability and Emergency Reserve Trader framework to address the remaining gap with costs to be recovered through the Procurer of Last Resort cost recovery mechanism.

Entities whose required share of load is not covered by qualifying contracts for the specific period will be required to pay a portion of the costs for the Procurer of Last Resort, up to an individual maximum of $100 million. When a T-3 reliability instrument is made, liable entities are on notice to procure sufficient qualifying contracts to cover their share of a one-in-two-year peak demand forecast. The market is expected to respond by contracting or developing new capacity. The additional demand for contracts is expected to facilitate new capacity in the market; that is, generation, storage or demand response.

Liable entities are defined as retailers, other market customers—for example, large customers acquiring energy directly from the wholesale market—and entities that opt in to manage the liability associated with their load. Liable entities may be required to demonstrate future compliance at the T-1 level by entering into sufficient qualifying contracts to cover their share of forecast one-in-two-year peak demand in the specified period.

To meet demand and ensure that smaller market customers will be able to fulfil their obligations under the Retailer Reliability Obligation, certain groups are required to make contracts available to the market; this is known as a Market Liquidity Obligation. The Market Liquidity Obligation is intended to have the dual benefit of assisting purchasers of the contracts in meeting their contracting obligation under the Retailer Reliability Obligation while also incentivising Market Liquidity Obligation groups to invest in dispatchable capacity.

Market Liquidity Obligation groups are required to post bids and offers with a maximum spread on an approved exchange for standardised products that cover the period of the gap. In South Australia, this applies to AGL, Origin and Engie. In other states, Snowy Hydro, EnergyAustralia, CS Energy and Stanwell are included in the group or have been identified as candidates.

Amendments to the Retailer Reliability Obligation proposed in this bill before the house will not alter the limitations or exclusions provided for in the existing Retailer Reliability Obligation mechanism, such as:

there is no ability for the minister to issue a T-1 reliability instrument. Unless a reliability gap is forecast by AEMO at T-1, the obligations under the Retailer Reliability Obligation will cease to operate at T-1;

the cut-off to make a T-3 reliability instrument is at least three years before the start of the specified period, subject to transitional arrangements; and

Tasmania is excluded from the requirements of the Market Liquidity Obligation. It does not apply, as the Tasmanian Electricity Supply Industry Act 1995 already requires Hydro Tasmania to offer a range of regulated OTC electricity contracts to authorised retailers operating in the state.

This bill will ensure a nationally consistent framework that is leveraged off the existing Retailer Reliability Obligation framework and again is an example of South Australia being recognised as a leader in the area of energy regulation. I would like again to take this opportunity to thank the minister and his office for the assistance they provided to me and to once again congratulate the minister for showing leadership at a national level in the area of energy regulation. I commend the bill to the house.

Ms HOOD (Adelaide) (17:22): The National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill 2022 aims to fix inefficiencies in the National Electricity Market. The bill will bring other states into line with South Australia by giving relevant ministers in other jurisdictions the same powers that already exist here. These powers provide the capacity to issue a formal warning to the market of a potential gap looming in the reliable supply of electricity.

Other speakers have addressed the technical side of why this bill should be supported. It rides on the back of the Retailer Reliability Obligation, which was established in 2019. The obligation is a complex set of rules and assessments that involve experts in the Australian Energy Market Operator, the Australian Energy Regulator, our own Department for Energy and Mining and energy companies themselves. Rather than repeating a technical overview, I would like to make some observations about what this bill says about the National Electricity Market.

The South Australian electricity system was formerly owned by the South Australian people. The government owned and operated ETSA and the generation arm, Optima. We were told that the system should be privatised. We were told that the private market would be more efficient and that customers would have cheaper power. Yet here we are, some 20-plus years after the Liberal government of the day privatised the system, now having to debate reforms to fix the inefficiency of the private market at a time when customers are staring down the barrel of electricity prices potentially rising 56 per cent in two years. As we on this side of the house have always known, the privatisation of essential services like electricity is a pathway to disaster.

To be clear, we are pro-business. We welcome the competition, the innovation, the investment and the job creation that the private sector brings, but it must be in the many, many sectors where those factors can flourish, not in the areas of essential services, which have elements of operating as a monopoly or where there are risks of market manipulation to the detriment of consumers' interests.

Let us consider the inefficiencies that led to the establishment of the Retailer Reliability Obligation. The obligation was deemed necessary because the private market was not working to ensure sufficient generation was being built. There was a risk of disorderly exit of ageing fossil fuel plants with insufficient replacement generation being available. A big stick—penalties that could be as high as $100 million—was put in place to incentivise that investment. Privatisation alone failed to create the incentive to invest, nor was the market liquid enough.

For competition to be successful, new players must be able to come in and disrupt a market with better offers to the target buyers. The Market Liquidity Obligation that works in tandem with the Retailer Reliability Obligation is an acknowledgement that the electricity market was not liquid. It was an acknowledgement that big, vertically integrated companies—the ones who bought out the previous government-owned utilities—could squeeze out newcomers. It was a failure of privatisation.

This bill acts as a patch on a broken system. It is a system that is ripe for deeper reforms that restore the centrality of consumers rather than shareholders. While those deeper reforms take shape, it is necessary to put patches like this in place. That is why the Malinauskas government supports this bill. I commend the bill to the house.

Ms THOMPSON (Davenport) (17:26): I rise to offer my support for the National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill presently before the house. The Retailer Reliability Obligation aims to give confidence to all stakeholders that sufficient dispatchable power will be available when required as the National Electricity Market transitions from ageing fossil fuel plants to new clean energy resources. It was designed to ensure the electricity system operates to reliably meet electricity demand at the lowest cost by incentivising retailers and other market customers in the National Electricity Market.

Mr Speaker, I am sure it comes as no surprise to you that the reason that we continue to speak on reforms to fix the inefficiencies in our electricity market is that former Liberal governments thought privatising essential services like electricity was a good idea. Now, 20 years after the Liberals privatised ETSA, I and fellow members of parliament are frequently contacted by our communities, wondering how they are supposed to afford to keep the lights on.

Many, often pensioners, are choosing between three meals a day or turning on their heating or cooling. It is heartbreaking to hear these stories, knowing that members of my community are still suffering the consequences of a short-sighted decision made by a Liberal government two decades ago. Here we are 20 years later, doing all that we can and making necessary changes to fix a broken system.

Under the Retailer Reliability Obligation, if a supply shortfall is forecast, this triggers an obligation on electricity retailers to demonstrate that they can meet their share of peak demand one year in advance. In 2019, the National Electricity (South Australia) (Retailer Reliability Obligation) Amendment Act provided for local provisions related to the triggering of the Retailer Reliability Obligation, which applied only here in South Australia. It provided for the South Australian minister to make a reliability instrument if it appeared, on reasonable grounds, that there would be a real risk that the supply of electricity to all or part of South Australia may be disrupted to a significant degree on one or more occasions during a period.

We all know how important reliable energy is to our society, affecting our economies, our livelihoods, our environment and our daily way of life. The storms that hit our state late last year and the blackouts that followed impacted many South Australians, including those in my electorate of Davenport. They reminded us of the importance of reliable electricity to our very survival. That week I spoke to residents who had concerns for elderly parents and children who relied on powered medical devices, and families who live pay cheque to pay cheque and had just done their weekly grocery shop before the power went out to their fridges. When it is very hot outside and the air-conditioning shuts down or it is the middle of winter and our heating is unavailable, people can quickly become vulnerable. Then there are the small businesses who lose produce or are unable to trade, or the large organisations that are dramatically disrupted.

The South Australian provisions have proven to be valuable for us, with reliability instruments being made in early 2021 and early 2022 to reduce the risk of an energy shortfall in South Australia during the 2024 and 2025 summers. The most recent Electricity Statement of Opportunities has identified a reliability gap for the 2024 summer, further justifying the merits of these provisions. Now other jurisdictions within the National Electricity Market are recognising the benefits of these provisions and are looking to adopt them.

In October 2021, national cabinet endorsed the energy ministers' decision to implement a ministerial reliability instrument for the Retailer Reliability Obligation for all regions in the National Electricity Market, as is currently in place for South Australia.

As such, the National Electricity (South Australia) (Ministerial Reliability Instrument) Amendment Bill seeks to expand to other jurisdictions these provisions that previously only applied in South Australia. The bill gives an option for the minister of the relevant participating jurisdiction to make a T-3 reliability instrument three years out for a specified period on or after 1 December 2025. Under the Retailer Reliability Obligation, a T-3 reliability instrument can only be made with three years' notice.

The intention of this bill is to better manage the risk that a reliability gap could emerge at any time across the 10-year forecast period that may not have been forecast by the Australian Energy Market Operator. A minister can only use this measure if they believe on reasonable grounds that there is a real risk that the supply of electricity will be disrupted to a significant degree during a specified period.

Broadening the existing ministerial reliability instrument from South Australia to all National Electricity Market jurisdictions strengthens the ability for jurisdictions to manage potential risks to system reliability. As the lead legislator, this bill also provides for the South Australian minister to make the initial rules relating to the ministerial reliability instrument.

Strengthening the regulatory resilience of the National Electricity Market is in the best interests of the South Australian community. I commend the bill to the house.

Debate adjourned on motion of Mr Odenwalder.