The Australian Energy Regulator (AER) has released a consultation paper on the annual review of the Market Liquidity Obligation (MLO) exchange and related applications. This paper invites stakeholders to submit comments on whether the current MLO exchange, ASX 24, continues to meet the National Electricity Rules (NER) criteria, the application for approval of Time of Day (TOD) Markets as an MLO exchange, and the potential impacts of approving additional MLO products (such as morning and evening peak electricity futures). Submissions are due by close of business on 28 August 2025. This consultation aims to ensure market transparency and liquidity while strictly adhering to clause 4A.G.23 of the Rules and the AER’s Interim MLO Guidelines.

The MLO is a market-making requirement under the Retailer Reliability Obligation (RRO) framework, designed to promote trading in electricity futures contracts linked to forecast reliability gaps. The RRO is triggered by the AER when the Australian Energy Market Operator (AEMO) identifies a potential reliability gap; it can also be triggered by Energy Ministers in the National Electricity Market. Following a T-3 trigger, obligated parties must commence quoting MLO products on approved MLO exchanges within five business days. The MLO operates between T-3 and T-1, providing liable entities with qualifying contracts to meet RRO requirements. Additionally, approving additional products may impact market dynamics, necessitating an assessment of their economic effects.

The AER invites stakeholder feedback to facilitate a transparent and robust consultation process. Submissions should be emailed to [email protected], preferably in an electronic format such as Microsoft Word and publicly available. All submissions will be treated as public documents unless confidentiality is arranged in advance; information claimed as confidential must be clearly marked and accompanied by a non-confidential version. This initiative supports a just transition for the industry and strengthens the regulatory framework of Australia’s National Electricity Market.
url:https://www.aer.gov.au/news/articles/communications/aer-consults-market-liquidity-obligation-exchange-review-and-applications