PIAC made a submission to AEMO’s reliability forecasting methodology issues paper.
AEMO has been tasked with providing forecasts to assist the implementation of the Retailer Reliability Obligation (RRO). The RRO is a mechanism to promote reliability in the NEM by imposing contracting requirements on retailers.
PIAC considers the RRO may not be necessary, however, acknowledges that, if it is implemented, the triggering of a reliability obligation must be based on good information.
PIAC considers reliability forecasting, and forecasting more generally, should be guided by the following principles:
- Forecast methodologies and inputs should be transparent and open to scrutiny by stakeholders.
- Forecast inputs and outputs should incorporate a range of scenarios to reflect degrees of confidence and uncertainty, rather than relying single scenarios.
- Forecasters should learn from the accuracy or otherwise of past forecasts by themselves and others.
These principles inform the content of our submission.