Benchmark Reserve Capacity Price

The Benchmark Reserve Capacity Price (BRCP) is used in the calculation of the maximum price that may be offered in a Reserve Capacity Auction, or as an input in the calculation of the administered Reserve Capacity Price if an auction is not required. Each year, AEMO is required to determine the BRCP in accordance with the Market Procedure: Maximum Reserve Capacity Price.

The BRCP aims to establish the marginal cost of providing additional reserve capacity in each Capacity Year. The BRCP is calculated by undertaking a technical, bottom-up cost evaluation of the entry of a 160 MW open-cycle gas turbine generation facility in the South West interconnected System in the relevant Capacity Year.

The steps AEMO followed to complete the annual review of the BRCP were:

• Calculate the draft value of the BRCP and publish the results in a draft report.
• Request public submissions on the draft report.
• Assess public submissions and adjust the BRCP if appropriate.
• Submit the final value of the BRCP in a final report to the Economic Regulation Authority (ERA) for approval.
• Publish the final report once it has been approved by the ERA.  

For the 2021 Reserve Capacity Cycle (which covers the 2023-24 Capacity Year), AEMO proposed a BRCP value of $151,700 per MW per year. The ERA approved this value on 29 January 2021. For more information on the BRCP for the 2021 Reserve Capacity Cycle, please see below.

For the BRCP for the 2022 Reserve Capacity Cycle and onwards, please see the ERA's website.

Historical Benchmark Reserve Capacity Prices

The BRCP was set at $150,000 per MW per year for the first Reserve Capacity Cycle, applying from market start to 1 October 2008. The figure below shows the breakdown of the cost components of the BRCP for the 2008–09 to 2023–24 Capacity Year.

The table below shows the BRCP and Reserve Capacity Price for each Capacity Year since market start. The Reserve Capacity Price is paid by AEMO for Capacity Credits not traded between Market Participants.

2021 Benchmark Reserve Capacity Price

The BRCP for the 2021 Reserve Capacity Cycle is $151,700 per MW per year and will be effective for the 2023-24 Capacity Year, which starts on 1 October 2023 and ends on 1 October 2024.

2020 Benchmark Reserve Capacity Price

The BRCP for the 2020 Reserve Capacity Cycle is $141,900 per MW per year and will be effective for the 2022-23 Capacity Year, which starts on 1 October 2022 and ends on 1 October 2023.

2019 Benchmark Reserve Capacity Price

The BRCP for the 2019 Reserve Capacity Cycle is $154,200 and will be effective for the 2021-22 Capacity Year, which starts on 1 October 2021 and ends on 1 October 2022. 

2018 Benchmark Reserve Capacity Price

The BRCP for the 2018 Reserve Capacity Cycle will be effective for the 2020-21 Capacity Year, which starts on 1 October 2020 and ends on 1 October 2021.

AEMO proposed a final value of $153,600 per MW per year to the Economic Regulation Authority (ERA).

This value was approved by the ERA on 29 January 2018 in accordance with clause 2.26 of the Wholesale Electricity Market Rules

2017 Benchmark Reserve Capacity Price

For the 2019–20 Capacity Year, a BRCP of $149,800 per MW per year was proposed by AEMO.

The ERA approved this value in accordance with clause 2.26 of the Market Rules. The BRCP of $149,800 per MW per year will be effective from 1 October 2019 to 1 October 2020.

Previous Benchmark Reserve Capacity Prices (before 2017)

BRCP determinations made before 2017 can be found here.

Five-yearly methodology review