Market Reviews: Open

Review of the Frequency Operating Standard

Reference:
REL0065
Reviewed by:
Reliability Panel
Initiated by:
Reliability Panel
Date initiated:
30-Mar-2017
Project Leader:
Ben Hiron
Overview

The Panel’s review of the FOS has been split into two stages. The process for this staging is discussed in further detail below. Generally, stage one has included consideration of a number of implementation and technical issues. Stage two will include a broader consideration of the settings of the FOS. Further discussion of the staged approach is included below.

The Panel’s review of the FOS has been split into two stages. The process for this staging is discussed in further detail below. Generally, stage one has included consideration of a number of implementation and technical issues. Stage two will include a broader consideration of the settings of the FOS. Further discussion of the staged approach is included below.

The Panel has proposed a number of changes to the FOS as part of the stage one review. These include:

  • implementation of changes already made to the NER, particularly from the Emergency frequency control schemes rule.
  • clarification and further guidance as to how AEMO operates the power system, particularly as this relates to managing different kinds contingency events.
  • Finally, the Panel has also proposed changes that are designed to recognise changes in the technologies used by consumers and how the FOS can be adapted to recognise these changes and reduce overall costs.

Specifically, the Panel has made the following changes to the FOS:

  • inclusion of a standard for protected events 
  • a revised requirement relating to multiple contingency events
  • a revised definition of ‘generation event’
  • a revised definitions in the FOS relating to island operation
  • a revised limit for accumulated time error in the mainland 

The stage one draft determination also sets out some of the issues identified for further consideration during stage two of the review. These include the cost/ benefit trade-offs that must be considered when assessing the settings of the FOS.

The Panel invites stakeholder submissions on the stage one draft determination by 10 October 2017.

Staged Approach

The Panel undertaking this review in two stages. This staged approach reflects the various ongoing reviews of market and regulatory arrangements that are likely to have an impact on the Panel’s ability to effectively assess the FOS.

Stage one is primarily addressing technical issues and changes stemming from the new Emergency Frequency Control Schemes rule, including the inclusion of the new protected event contingency category in the FOS. 

The Panel published a draft report for stage one on 12 September 2017 and intends to publish a final report in early November 2017.

Stage two will consider the various components of the FOS, including the settings of the frequency bands and time requirements for maintenance and restoration of system frequency.

Key Dates for the review

Milestone Date
Stage one Draft Determination  12 September 2017
Close of submissions – stage one Draft Determination 10 October 2017
Stage one Final Determination 7 November 2017
Stage two Draft Determination April 2017
Stage two Final Determination July 2018


Background

On 12 September 2017, the AEMC provided a revised Terms of Reference to the Panel for the review of the FOS. The revised terms of reference extend the completion date for the review from 22 December 2017 to 31 July 2018 to account for the in-depth assessment of issues associated with stage two. This is in line with recommendation 2.3 from the Finkel Panel report, Independent Review into the Future Security of the National Electricity Market – Blueprint for the Future, which recommends that by mid-2018 AEMO and the AEMC consider the costs and benefits of tightening the frequency operating standard.

One of the Australian Energy Market Operator’s (AEMO) key obligations under the National Electricity Rules (NER) is to maintain the power system in a secure operating state.  This includes keeping system frequency within the normal operating frequency band.

The frequency requirements that AEMO must meet are set out in the FOS, which is defined in the NER and determined by the Reliability Panel.

The FOS includes defined frequency bands and timeframes in which the system frequency must be restored to these bands following different events, such as the failure of a transmission line or separation of a region from the rest of the NEM. These requirements then inform how AEMO operates the power system, including through applying constraints to the dispatch of generation or procuring ancillary services.

The FOS currently consists of two separate standards: one for the mainland NEM, and one for Tasmania. This reflects the different physical and market characteristics of the Tasmanian region as opposed to the mainland NEM.

The FOS for Tasmania was last reviewed and determined by the Panel on 18 December 2008. The FOS for the mainland was last reviewed and determined by the Panel on 16 April 2009.

On 11 July 2017 the (Panel published an issues paper seeking stakeholder comment on issues relating to the frequency operating standard (FOS) that applies to power system frequency in the national electricity market (NEM).

On 14 July 2017 the Panel published an updated version of the Issues paper. This was necessary to correct an error identified in the original issues paper, which referred to an earlier version of the Tasmanian frequency operating standard. The correct values for the Tasmanian frequency operating standard have now been included in section 2.2.2 and Appendix C of the revised issues paper.

The AEMC’s system security and reliability work program

The review of the FOS is one part of an integrated approach to addressing current challenges relating to maintaining system security as the NEM undergoes technological transformation. 

In June 2017, the AEMC published a final report for the System security market frameworks review. This report outlined a package of reforms to guard against technical failures that lead to cascading blackouts, and to deliver a more stable and secure power supply to Australian homes and businesses.

The ongoing review processes that are particularly relevant to the Panel’s review of the frequency operating standard include:

  • the requirement for a minimum level of inertia to manage the rate of change of frequency in the power system.  This is being considered by the AEMC through the Managing the rate of change of power system frequency rule change.
  • changes to the requirements for generator performance with respect to frequency, such as the potential introduction of a mandatory governor response capability. This is being considered through the AEMC’s Frequency control frameworks review.
     

 

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