AEMC reforms to guard against future blackouts

The Australian Energy Market Commission (AEMC) has released its power system security report today with a package of reforms to guard against technical failures leading to blackouts.

The AEMC’s power system security review was initiated in July 2016 to strengthen the security of the National Electricity Market.

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.

He said the proposed rules to better manage frequency and strengthen the system will involve 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 blackouts.

– 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 stabilise the network as the changing generation mix accelerated.”

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.