The reserve capacity auction is run if insufficient capacity credits have been allocated at the bilateral trade declaration stage to satisfy the reserve capacity requirement.

The maximum reserve capacity price sets the maximum bid that can be made for capacity offered in the auction. The clearing price becomes the reserve capacity price for all capacity credits traded through AEMO. If no auction is held, the reserve capacity price is the maximum reserve capacity price, adjusted for any excess capacity.

A facility that is assigned capacity credits through a reserve capacity auction may take a special price arrangement.

To date, a reserve capacity auction has never been held. This page will be updated with relevant information if an auction is required in the future.

Special price arrangements

A special price arrangement allows a market participant to secure a price for capacity credits that is different to the reserve capacity price. There are two types of special price arrangements:

• Short-term special price arrangement – a one-year special price arrangement may be granted when an offer clears in the auction at a higher price than the clearing price. This may occur when a small, relatively expensive facility offers a cheaper capacity solution than a large, low cost facility. This arrangement can only apply if the facility is not covered by an existing 10-year special price arrangement.

Under clause 10.5.1(f)(vi) of the Market Rules, AEMO must publish the amount of reserve capacity, the term, and the special reserve capacity price related to the special price arrangement. This information must be published by 7 January in the year after the reserve capacity auction.

There are currently no special price arrangements in place.