COAG MEETING: Energy security remains top priority

Security in the National Electricity Market and affordability of electricity remain top priorities of the COAG Energy Council, which met last Friday for the ninth time.

Ministers discussed the risks posed to the security and reliability of the National Electricity Market (NEM) and the affordability of electricity for Australian consumers in light of the events earlier this month in South Australia, New South Wales and the Australian Capital Territory.

More than 40,000 South Australian households were left in the dark after the Australian Energy Market Operator ordered load shedding in the middle of a heatwave.

“All ministers agreed understanding both the sequence and underlying causes of the events of 8 to 11 February, and the voluntary reduction of demand during the period, is of critical importance in making decisions on market reform and instituting technological changes in the NEM,” the meeting communiqué said.

In the meeting, the AEMO and the Australian Energy Regulator provided updates to Ministers to explain their understanding of events, discuss next steps and aid ministers’ understanding of risks and challenges in the NEM.

The Commonwealth also updated the Council on its intention to work with AEMO and the Bureau of Meteorology to provide additional forecasting expertise in light of the extreme weather events affecting the NEM.

“This change should improve AEMO’s capability and improve its ability to manage demand and supply, as it currently relies on private sector services for weather forecasting,” Energy Minister and Council chair Josh Frydenberg said.

The COAG Council continued its focus on energy security with Australia’s Chief Scientist Dr Alan Finkel providing an update on the progress of the Independent Review into the Future Security of the National Electricity Market.

Dr Finkel discussed options to fast-track ‘proof-of-concept’ projects designed to increase security and reliability in the country’s electricity system.

As part of this, the Commonwealth, through the Australian Renewable Energy Agency (ARENA), will establish a trial of using the Hornsdale 2 wind farm in South Australia to provide Frequency Control and Ancillary Services (FCAS) in an effort to provide greater energy security and stabilise the grid.

“The trial will bring together the Australian Energy Market Operator, ARENA and Neoen Australia to maintain frequency on the electrical system which has traditionally only been provided from synchronous thermal generation,” Energy Minister and Council chair Josh Frydenberg said.

“This builds on steps already taken to stabilise the grid following the September 2016 blackout in South Australia, which includes a new requirement for two gas generating units to be on at all times, a greater constraint on the Heywood interconnector and more robust settings on wind farms.”