AEMC release the ‘2026 Reliability Standard and Setting Review’ draft report on Thursday 27th Nov 2025

The AEMC today released its draft report of the 2026 Reliability Standard and Settings Review. The report outlines the preliminary views of the reliability panel, and forms a step in determining what level of reliability and price-setting parameters should apply in the NEM for the next review cycle: July 1^st 2028 to June 30^th 2032.

Based on the executive summary and a quick skim through the document, below are the headline points that stood out to me.

The Reliability Panel’s preliminary view is that the optimal reliability standard for the 2028–32 period should sit within a band of 0.002% to 0.004% USE (the current standard is 0.002%), with the panel stating that 0.003% is their recommended middle ground. The report stats that costs for new open-cycle gas turbines have risen while updated VCR values have fallen by around 18% across all regions, suggesting that customers now place somewhat less value on avoiding relatively rare reliability shortfalls. The report notes, “a reliability standard at the midpoint of 0.003 per cent USE is most aligned with maintaining consistent market price settings while also having minimal impact on how customers experience reliability.”

The Panel also signals its intention to retain a number of existing market settings. The market floor price would stay at -$1,000/MWh, with a proposed change that would see the market automatically clear at the floor during Minimum System Load 3 conditions — which mirrors how prices are set at the MPC during load-shedding events. Likewise, the administered price cap and floor would remain at $600/MWh and -$600/MWh, and the cumulative price threshold would continue in its current form. While the Panel is not yet recommending specific values for the MPC and CPT, it provides modelling of possible combinations for consideration in stakeholder submissions.

The report also discusses the modest progress of government-orchestrated auction schemes (such as the CIS, LTESA and FERM) so far, reinforcing the view that the reliability settings must continue to stand on their own. On page 45, we noted that our recent analysis into these government underwriting schemes was quoted to show that the majority of new projects reaching FID over the past two and a half years have not been underwritten via these schemes.

The full draft report can be found on the AEMC’s website here. Submissions to the draft report close on January 29th, 2026.