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 frequency operating standard (FOS) has been split into two stages. Stage one is now complete. Stage one addressed primarily technical issues and market framework changes stemming from the new emergency frequency control scheme Rule, including the new category of protected contingency event in the FOS.

The Panel’s review of the frequency operating standard (FOS) has been split into two stages. Stage one is now complete. Stage one addressed primarily technical issues and market framework changes stemming from the new emergency frequency control scheme Rule, including the new category of protected contingency event in the FOS. 
 
Stage two will include a broader consideration of the settings of the FOS and will commence when the AEMC’s frequency control frameworks review is further progressed. Further discussion of the staged approach is included below. 
 
At the conclusion of stage one, the Panel made a new FOS, effective 14 November 2017.The changes for this new FOS include:
  • implementation of changes already made to the NER, through  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 of contingency events. 

Specifically, the Panel has made these changes to the FOS following stage one of the review:

  • 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 

Staged Approach

The Panel is 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 has primarily addressed technical issues and changes stemming from the new Emergency frequency control schemes rule, including the inclusion of the new protected event contingency in the FOS.  

The Panel published a draft report for stage one on 12 September 2017 and a final report on 14 November2017.

Stage two of the review will commence at a later date when the Frequency control frameworks review has been further progressed. In particular, the Panel recognises the relevance of  the review’s consideration of primary frequency control and governor response during normal operation.

Stage two will involve an assessment of each of the elements of the FOS, including the boundaries of the various frequency bands and the timeframes for restoration of power system frequency following a specific event.

During stage two, the Panel will also consider whether it is appropriate to retain the current limit in the FOS on accumulated time error and whether the FOS should include a limit on the rate of change of frequency (ROCOF).

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 14 November 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 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 November 2017 the AEMC published an issues paper for the Frequency control frameworks review. This review is investigating the market and regulatory arrangements necessary to support the effective control of system frequency in the NEM. Elements of this review that are particularly relevant to the Review of the FOS include:

  • whether mandatory governor response requirements should be introduced to support power system frequency regulation.
  • potential changes to the arrangements in the NER that relate to the markets for frequency control ancillary services (FCAS).

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.

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