New electricity rules to prevent power failures

The Australian Energy Market Commission (AEMC) has released a package of final rules to guard against technical failures that lead to cascading blackouts.

Together with new rules made in March 2017 that strengthen ‘last line of defence’ frequency control schemes, the new rules address risks to energy security created by the power system’s changing generation mix.

AEMC chairman John Pierce said the new rules are essential to supporting market transformation, as more non-synchronous, lower emission generators like wind and solar come in, and synchronous generators like coal retire.

“As the power system continues to evolve, these rule changes will deliver the necessary inertia into the system for frequency control,” Mr Pierce said.

“They will also require networks to provide a minimum level of system strength to help keep the system stable.

“These new rules are designed to provide confidence in the security of the system at least cost to consumers.”

The new rules involve AEMO and the networks implementing solutions together, and align with recommendations in the Finkel review.

The rules:

  • make networks provide minimum levels of inertia when inertia shortfalls are identified by AEMO;
  • enable networks to contract with suppliers of inertia substitutes like fast frequency response services from emerging technologies like batteries, when providing these minimum levels (where AEMO agrees);
  • give AEMO more tools to increase inertia and help keep frequency in required operating bands;
  • make networks provide the services necessary to meet minimum levels of system strength at key locations when shortfalls are identified by AEMO;
  • require new connecting generators to pay for remedial action if they are going to negatively impact on minimum system strength levels;
  • make generators and networks provide more detailed information about how their equipment performs to help AEMO manage the changing power system; and
  • allow AEMO to request data from generators and networks to assess if remedial action is needed for system strength.

In addition to these short-term steps, the AEMC is continuing to implement a new framework for power system security.

The Frequency control frameworks review is looking at how best to integrate distributed energy resources like batteries, new fast frequency control services and demand response to help keep the system secure.

The AEMC is also undertaking a system reliability program, which includes the Reliability frameworks review, and the Reliability Panel is reviewing the reliability standard and market price settings.

The Reliability frameworks review is considering a range of fundamental changes to market design to improve the ability of the market to deliver more capacity, and capacity valued by the power system, when it is needed – both in the short and longer term.

“In particular, we’re looking at how to address the variability of renewable generation to make it firmer or dispatchable, but in a way that minimises costs for consumers and also supports much needed private sector investment in the electricity sector, which is estimated to be in the billions,” Mr Pierce said.

The AEMC’s progress reports on both the Reliability frameworks review and the Frequency control frameworks review are due in December 2017.