Market Review: Open

Overview

The AEMC is conducting a review to address deteriorating frequency performance in the national electricity market. With more wind and solar now in the system, and coal-fired generators exiting, the technical characteristics of the electricity grid are changing. This makes it more challenging to maintain a stable frequency and keep the system secure.
View more

The AEMC is conducting a review to address deteriorating frequency performance in the national electricity market. With more wind and solar now in the system, and coal-fired generators exiting, the technical characteristics of the electricity grid are changing. This makes it more challenging to maintain a stable frequency and keep the system secure. 

Draft report

On 20 March 2018 the AEMC published a draft report on the Frequency control frameworks review. The report describes how frequency performance has worsened in recent years, and recommends changes to help make the power system more stable at the least cost. 

The draft recommendations aim to:

  • address current concerns with frequency performance in the NEM
  • remove barriers to distributed energy resources participating in system security frameworks
  • explore how best to integrate faster frequency control services offered by new technologies into the current regulatory and market arrangements.

The review forms part of the AEMC’s ongoing system security work program, which aims to address risks to power system security as the electricity sector changes. 

Submissions on the draft report closed on 24 April 2018 and are available below.

Background

The changing generation mix is creating challenges for the control of power system frequency. Specifically, an increased potential for imbalances between electricity demand and supply is driven by:

  • a reduction in frequency control capability, as a result of the exit of traditional providers of frequency control services and a reduction in the frequency responsiveness of generators during normal operation
  • an increased variability and unpredictability of supply and demand, which creates challenges for AEMO's forecasting and dispatch processes.

The AEMC considers that it is timely to assess whether the current market and regulatory arrangements to support effective control of system frequency are appropriate in light of these issues, and what opportunities there are for the changing generation mix to help AEMO maintain power system security. 

On 7 November 2017 the AEMC published an issues paper to commence consultation on the review. The issues paper provided an overview of the existing frequency control framework, discussed a range of potential issues associated with the current framework, and sought stakeholder feedback on these matters. The AEMC received 18 written submissions on the issues paper, which are available below.

On 19 December 2017 the AEMC published a progress update on the review. The progress update provided an overview of the main issues under consideration, a summary of stakeholder views on these issues (as set out in submissions to the issues paper) and the AEMC’s proposed approach to addressing these issues in the draft report.

Collaboration

The AEMC has established a Technical Working Group for the review to provide technical advice on the issues under consideration. The Technical Working Group comprises network service providers, generators, retailers, energy service providers, consumer representatives, AEMO and the AER. 

The AEMC has also established a Reference Group – comprised of the Senior Committee of Officials, AEMO and the AER – to provide strategic advice on the review.  

Next steps

The AEMC is due to publish a final report on the review in July 2018. 

View less

Documentation

INITIATION

AEMC Documents