The Australian Energy Market Commission (AEMC) has released a package of recommendations and reforms to improve reliability, security and regulation of Australia’s power system at the least cost.
AEMC chairman John Pierce AO said the package outlined a number of concrete and practical changes that are necessary to accommodate significant changes in both electricity generation and consumption.
The three separate reports deliver on eight key recommendations of the 2017 Finkel Review and include: a review of reliability frameworks; an assessment of the flexibility of distribution network regulation to support increasing distributed energy resources (DER); and more changes to frequency control arrangements to improve system security.
Mr Pierce said the changes are another step towards a more resilient power system that can efficiently serve energy users into the future without imposing unnecessary costs on consumers.
“We’ve proposed some new rules and mechanisms for adoption right now and added more flexibility into system frameworks so they can keep evolving in response to changes in technology and the economics of a reliable and secure power system,” Mr Pierce said.
“We recognise the need to take evidence from trials currently underway.
“We will also continue to adapt the regulatory framework to the sector’s experience and growing knowledge about innovations like demand management options or the ability of virtual power plants (VPP) to improve the stability of electricity supply.
“This creative evolution of frameworks also applies to network regulation where we have found both network businesses and the Australian Energy Regulator (AER) have the tools available to manage high levels of distributed energy resources (DER), but this needs to be monitored as the distribution networks get more clarity about what their customers are doing and what they want.”
The key changes include:
- Clearing the way for energy users to participate directly in the wholesale electricity market to facilitate greater demand management and deliver lower-cost reliability, fast-tracked through early collaboration with stakeholders. This led to a commitment by the Total Environment Centre (TEC) and Public Interest Advocacy Centre (PIAC) in their submissions to the review to submit a rule change request. (Reliability Frameworks Review)
- Improving the transparency and consistency of forecasting supply and demand and the regular reporting of frequency variations in the market to inform both on-the-ground decisions for generators, large users, retailers and the market operator and the evolution of future policy (Reliability Frameworks Review and Frequency Control Frameworks Review).
The AEMC will also begin consideration of other ways in which network regulation may need to change in the future to support a grid with significantly more multi-directional energy flows.