Market Review: Completed

Overview

On 18 April 2019, The Reliability Panel published a final determination and a revised FOS for stage two of the review of the frequency operating standard (FOS). This review was undertaken in two stages to accommodate interactions with related work programs.
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On 18 April 2019, The Reliability Panel published a final determination and a revised FOS for stage two of the review of the frequency operating standard (FOS). This review was undertaken in two stages to accommodate interactions with related work programs.

Under the National Electricity Rules, the Australian Energy Market Operator (AEMO) must keep the power system stable and securely operating at a frequency close to 50 hertz. The specific frequency requirements that AEMO must meet under different power system conditions are set out in the frequency operating standard, which is determined by the Reliability Panel. This review investigated the appropriateness of the settings in the standard, in light of the ongoing energy market transformation as conventional synchronous generation leaves the market and non-synchronous generation such as wind and solar panels enters the market.  

Stage one

Stage one was completed in November 2017. This first stage 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. At the conclusion of stage one, the Panel made a new version of the FOS, effective 14 November 2017.The changes made in this new version of the FOS included: 

  • implementation of changes already made to the National Electricity Rules, 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.

Stage two 

Stage two commenced on 26 July 2018 and was completed with the publication of a final determination and a revised FOS on 18 April 2019. Stage two of the FOS review assessed and resolved remaining issues identified in stage one of the review, except for the following issues that relate to how the National Electricity Rules set out the components of the FOS: 

  • the requirements in the FOS for frequency performance during normal operation 
  • a standard for the rate of change of frequency in the power system 

These issues are being considered by the AEMC as part of the frequency control work plan that has followed our Frequency control frameworks review.

Final determination

On 18 April 2019, the Panel published a  Final determination and a revised FOS which addressed a number of issues that were identified through stage one of this review. The revised FOS includes changes in relation to:

  • the limit on the size of the largest generation event in the Tasmanian power system
  • improvements to the structure and consistency of the FOS.

This final determination also includes a summary of the Panel’s consideration of: 

  • the settings in the FOS that relate to contingency events
  • the limit in the FOS on accumulated time error. 

On the advice of AEMO, the Panel has maintained the existing settings in the FOS in relation to these issues, noting that the immediate priority is the joint AEMC-AEMO frequency control work plan published as part of the final report for the Frequency control frameworks review. The revised FOS will take effect on 1 January 2020 to allow for affected parties to make arrangements to adjust to the revised requirements.

 

Key Dates for the review

Milestone Date
Stage one Draft Determination  12 September 2017
Stage one Final Determination 14 November 2017
Stage two Draft Determination 6 December 2018
Close of submissions - Stage two Draft Determination 17 January 2019
Stage two Final Determination 18 April 2019
Revised FOS takes effect  1 January 2020

The AEMC’s system security 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 July 2018 the AEMC published a final report for the Frequency control frameworks review. Through this review, the Commission investigated the market and regulatory arrangements that support effective control of system frequency in the NEM. Elements of this review that are particularly relevant to the Review of the FOS include:

  • investigation of frequency control during normal operation 
  • potential changes to the arrangements in the NER that relate to the markets for frequency control ancillary services (FCAS). 
  • monitoring and reporting of power system frequency performance

The Frequency control frameworks review identified a number of issues which need to be addressed together with a longer term collaborative work plan. Learn more about the frequency control work plan

Background

On 26 July 2018 the AEMC provided a revised Terms of Reference to the Panel to commence stage two of the review of the FOS. The revised terms of reference extended the completion date for the review from 31 July 2018 to 31 March 2019, to account for the assessment of issues associated with stage two. 

On 25 March the AEMC approved the Panel’s request for the completion date for the review to be extended by one month, until 30 April 2019. This extension was required for the Panel to address issues raised by stakeholders in submissions to the draft determination for stage two of the Review.

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. One of AEMO’s key obligations under the NER is to maintain the power system in a secure operating state. This includes keeping system frequency within the normal operating frequency band that is set out in the FOS.
 
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.
 
Prior to the commencement of this review, the FOS for Tasmania was last reviewed and determined by the Panel on 18 December 2008 and the FOS for the mainland was last reviewed and determined by the Panel on 16 April 2009. 
 

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