Market Review: Open

Overview

The Commission has commenced an investigation into the effectiveness of the current frameworks for the management of system strength. The investigation will examine whether any improvements could be made to more effectively and efficiently address system strength issues in the NEM.  
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The Commission has commenced an investigation into the effectiveness of the current frameworks for the management of system strength. The investigation will examine whether any improvements could be made to more effectively and efficiently address system strength issues in the NEM.  

The current frameworks were put in place in 2017 to address immediate system strength issues. They were successful at keeping the system secure. The pace of the power transition means the time has now come to adjust and expand the system strength frameworks given the rapid connection of large numbers of new non-synchronous generation. These frameworks need to evolve and be agile and flexible given the transition underway.

This investigation is part of the Energy Security Board (ESB)’s broader system security work program. This work program looks to design a robust and resilient power system, for now and the future. System strength is a critical system security service and is pivotal to facilitating the power system transition underway.

The Commission is considering whether improvements could be made to: 

  • more effectively identify and address low levels of system strength as they arise in NEM regions, to help maintain system security at the lowest possible cost
  • allow for the provision of increased levels of system strength to enable greater output from lower cost generation sources, to deliver lower cost electricity for consumers. 
  • increase the transparency and efficiency for remediating the system strength effects from large numbers of new connecting generators. This will help make the process of connecting generators more effective, to facilitate the transition to the high renewables grid of the future.

The investigation follows on from the Investigation into intervention mechanisms and system strength in the NEM for which a final report was published in July 2019. 

Discussion paper

The Commission published a discussion paper on 26 March 2020. This paper:

  1. Sets out the key issues with the current system strength frameworks, including the “do no harm” obligation on connecting generators and the minimum system strength frameworks.
  2. Explores some of the key concepts and considerations relevant to the provision of system strength, including exploring what system strength is, why it is needed, how it is provided, and the physical attributes of the service.
  3. Sets out, at a high level, some potential models of how the system strength frameworks might be evolved going forward. 

The discussion paper is designed to inform stakeholder thinking on this issue and to provide an avenue for consultation on some of the current and emerging system strength issues. 

A submission template has been provided to assist stakeholders making submissions to the discussion paper. It contains some explicit questions that the Commission would like stakeholder input on. It is designed to assist submissions but not to restrict stakeholder input – stakeholders are invited to provide any other comments on any of these issues, attributes, approach and models raised in the paper. 

Background 

In September 2017 the Commission made the Managing power system fault levels final rule that established two system strength frameworks: 

  1. The minimum system strength framework – obligates transmission network service providers (TNSPs) to procure system strength services needed to provide the levels determined by the Australian Energy Market Operator (AEMO) if AEMO has declared a shortfall. 
  2. The ‘do no harm’ framework – requires AEMO to develop system strength impact assessment guidelines that allow TNSPs and generators to assess the impact of a new generator connection on system strength. From this, the new connecting generator is obligated to do no harm to the security of the power system in relation to system strength. As such, if the new connecting generator has a negative impact on the fault level (a measure of the level of system strength in that area) then that generator must remediate that impact. 
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Documentation