AER releases verdict on 2016 SA blackouts

Image: Glynnis Jones/

The Australian Energy Regulator (AER) has released the findings of its inquiry on the state-wide blackout in South Australia on September 28, 2016, finding overall a high level of compliance by market participants. However, there was non-compliance with five clauses of the National Electricity Rules in relation to actions during the pre-event and market suspension periods.

Black System Event

On September 28, 2016, a severe storm damaged transmission and distribution electricity assets in the lower Eyre Peninsula and mid-north region of South Australia, triggering a chain of events that led to a state-wide power outage. Three major 265kV transmission lines were damaged in the mid-north of the state.

Pre-event forecast conditions

On September 27 and 28, the Bureau of Meteorology (BOM) warned of a severe storm heading to South Australia. On September 28, it issued a number of severe weather warnings, including predictions of damaging winds and thunderstorms. For most of the morning the forecast was for damaging winds of up to 120km/hr. From 12:56 onwards, it was upgraded to destructive wind gusts of up to 140km/hr. Both ElectraNet and AEMO were reviewing conditions and the potential effect on the power system during the pre-event period.

South Australia going black

At 16:18, multiple power system faults occurred in quick succession due to the storm activity and damage due to transmission lines. The faults created voltage disturbances, which then rapidly caused several of the wind farms operating at the same time to shut down. This resulted in a sustained reduction of wind generation of 456MW, which was significant as 48 per cent of South Australia’s overall energy supply was from wind farms.

Under these circumstances high levels of power flowed into South Australia from Victoria. This cased the Heywood Interconnector to peak around 890MW within a very short period, which led to a shock to the power system, in turn activating the automatic loss of synchronism protection on the Heywood Interconnector, causing it to be shut down.

The loss of Heywood caused South Australia to be disconnected from the rest of the NEM and reduced the available supply to meet demand, resulting in the remaining online generators tripping off and the state going black.

Related article: AEMO: Power reserves prevent summer blackouts

Market suspension

AEMO suspended operation of the spot market in South Australia immediately after the collapse of the power system into a black system and invoked the market suspension pricing schedule as required by the rules. On Thursday, September 29, AEMO was directed to keep the market in South Australia suspended via a ministerial direction, which was extended on October 6 and revoked on October 11.

Breaches of rules

The specific breaches identified with pre-event compliance are:

  1. Abnormal conditions (NER clause 4.2.3A(b)): Failure to take all reasonable steps to keep itself informed of abnormal conditions. While AEMO took several steps to keep itself promptly informed about the abnormal conditions on the day, we consider an additional reasonable step could have been taken.
  2. Notification to market participants (NER clause 4.2.3A(c)): Failure to provide formal notification to market participants that the loss of multiple generating units or transmission elements, which would not be a credible risk in normal operating circumstances, was more likely to occur because of the abnormal weather conditions on the day. Although the evidence indicates AEMO considered this and communicated with some market participants about it, it failed to provide the appropriate notification as required by the NER.
  3. Review of criteria for reclassifying contingency events (NER clause 4.2.3B): Failure to conduct formal reviews of the reclassification criteria in the manner required by the Rules in the three years prior to the Black System Event. The specific consultation documents we have reviewed are limited in scope to bushfires and lightning, and do not invite relevant stakeholders to comment on other criteria in the Power System Security Guidelines or criteria that could potentially be included.

Related article: Powercor to plead guilty to powerline charges

The specific breaches identified with market suspension compliance are:

  1. Publication of notices (NER clause 4.8.5A): Failure on several occasions to issue market notices when there were foreseeable circumstances that may have required AEMO to intervene in the market. There was also an occasion when AEMO did issue a market notice, but we assessed that it was not sufficiently immediate.
  2. Operating procedures (NER clause 4.8.9(b)): Failure to adequately develop procedures for the issuance of directions in line with the legislated principles
    as required.

The non-compliance resulted in confusion among generators as to whether they were being formally directed, reducing their ability to make informed decisions. Our recommendations therefore relate to transparency through the publication of timely market notices as well as clarity of verbal communications.

Proposed future action

Actions proposed by the AER include:

  • implementing more rigorous weather monitoring processes
  • standardising notifications for market participants during abnormal weather conditions
  • more broadly reviewing the criteria under which weather events are classified
  • improving AEMO operator training, and
  • clarifying roles and responsibilities of the market operator and network providers regarding system restoration.

The AER has acknowledged some of these actions have commenced.

The AER’s report will also be a key input into the policy review of the regulatory framework to be undertaken by the Australian Energy Market Commission (AEMC) in coming months.

Read the full report into the 2016 SA blackout event here.