About SA FERM Tenders

As the independent Scheme Administrator for the SA FERM, ASL conducts competitive tenders for Firm Energy Reliability Mechanism Agreements (FERMAs) to assist in meeting the Firm Energy Target. These tenders are designed to support the development of new long duration dispatchable capacity projects to support secure, reliable and affordable electricity supply for South Australia. Tenders are conducted upon direction from the SA Minister for Mining and Energy, in accordance with the Regulations.

Tender process

SA FERM tenders are run through a single-stage eligibility and merit assessment process. Bids are assessed against mandatory eligibility requirements and a range of bid assessment criteria, including:

  • Project deliverability
  • Organisational and financing capability
  • Financial value
  • Commercial departures

Following assessment and the conclusion of any negotiations, ASL recommends successful Bids to the Financial Vehicle. The Financial Vehicle is the contract counterparty for the FERMA.

About Firm Energy Reliability Mechanism Agreements

FERMAs are long-term revenue support contracts, designed to promote financial certainty and incentivise reliable operational performance. They provide a mechanism to underwrite a portion of a project’s annual Net Revenue.

The FERMA includes a financial mechanism for annual Scheme Payments when Net Revenue falls below a pre-agreed Revenue Floor, and an Upside Payment obligation when Net Revenue exceeds the Revenue Floor (subject to caps).

Bidding for a FERMA

SA FERM tenders are run through a competitive tender process.

Proponents must submit evidence addressing the relevant eligibility and bid assessment criteria for each tender. This includes non-financial information used to assess project deliverability, organisational and financing capacity. Financial value is assessed by considering a project’s forecast benefits relative to the forecast cost of support under the FERMA. Benefits of a project includes its reliability contribution, wholesale market benefits and system security services. All successful projects are required to demonstrate financial value for South Australian consumers.