New rules proposed to deal with transition to renewable energy

Proposed new rules released by Australian Energy Market Commission (AEMC) to guard against technical failures in the National Electricity Market confirm the growing recognition that renewables are increasingly taking over from coal-fired power stations.

The rules are outlined in the AEMC’s power system security review, initiated in July 2016 in the wake of the failure of the South Australian power system.

AEMC Chairman John Pierce said the rules address risks to energy security created by the power system’s changing generation technologies - as more non-synchronous, lower emission generators like wind and solar come in, and synchronous generators like coal retire.

“We are focused on the power system’s evolution. Our reform package is looking at ways to stabilise the system as the generation mix changes, and new technology generators connect,” Mr Pierce said.

Mr Pierce said the proposed rules to better manage frequency and strengthen the system will involve the Australian Energy Market Operator (AEMO) and the networks implementing solutions together.

The new plan for power system security:

  • makes networks provide minimum levels of inertia where inertia shortfalls are identified by AEMO;

  • enables networks to contract with suppliers of inertia substitutes like fast frequency response services from emerging technologies like batteries, when providing these minimum levels, if AEMO agrees;

  • gives AEMO more tools to increase inertia and help keep frequency in required operating bands;

  • includes faster emergency frequency control schemes to strengthen the “last line of defence” to help stop system-wide black-outs;

  • makes networks responsible for maintaining a minimum level of system strength for each connected generator;

  • requires new connecting generators to pay for remedial action if they would cause minimum system strength for other generators to be breached;

  • foreshadows a new market-sourcing mechanism for inertia services and facilitates greater use of new technology like battery storage to back-up the system when something goes wrong.

“The NEM today is a far more complex interconnected system of renewable and non-renewable energy generation,” Mr Pierce said.

“Technical parameters of the system need to be maintained as it transforms: inertia is necessary to absorb shocks that affect the frequency of the system; and the system has to be strong enough to keep voltage stable so generators can stay connected to the grid.”

“The AEMC started this review as it became evident that different arrangements were needed by AEMO and transmission companies to secure the system and stabilise the network as the changing generation mix accelerated.”

“The draft rule changes are focused on making sure the grid can continue to be operated securely and provide energy to consumers,” he said.

The package is consistent with the system security outcomes recommended by the Finkel review.

The AEMC will continue collaborating with AEMO and the Australian Energy Regulator to conclude consultation on the draft rules and implement the new framework for power system security.

He also called for submissions on proposed rules to stabilise the grid in relation to frequency management and system strength. Submissions are due by July 4.

The AEMC's final report and other information is here

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