The Australian Energy Market Commission (AEMC) released its power system security report today with a package of reforms to guard against technical failures that lead to cascading blackouts.

The AEMC’s power system security review was initiated in July 2016 to strengthen the security of the National Electricity Market.

AEMC Chairman John Pierce said he was pleased to release the review’s final report to deliver a more stable and secure power supply to Australian homes and businesses. He also called for submissions on proposed rules to stabilise the grid in relation to frequency management and system strength.

Mr Pierce said the rules address risks to energy security created by the power system’s changing generation technologies - as more non-synchronous, lower emission generators like wind and solar come in; and synchronous generators like coal retire.

“We are focused on the power system’s evolution. Our reform package is looking at ways to stabilise the system as the generation mix changes, and new technology generators connect,” Mr Pierce said.

The AEMC started making new rules on system security earlier this year. Today’s package builds on that work which has already expanded the risk management role for the Australian Energy Market Operator (AEMO) to detect emerging security issues and take preventive action.

The AEMC’s report was welcomed by AEMO Chief Executive Office, Audrey Zibelman.

“AEMO welcomes the publication of this system security review report and draft rules by the AEMC. We acknowledge the progress made on these important matters to date and look forward to continuing the collaborative work to ensure the services required for the secure operation of the power system remain available in the future,” she said.

Mr Pierce said the proposed rules to better manage frequency and strengthen the system will involve AEMO and the networks implementing solutions together.

The new plan for power system security:

  • makes networks provide minimum levels of inertia where inertia shortfalls are identified by AEMO.
  • enables networks to contract with suppliers of inertia substitutes like fast frequency response services from emerging technologies like batteries, when providing these minimum levels, if AEMO agrees.
  • gives AEMO more tools to increase inertia and help keep frequency in required operating bands
  • includes faster emergency frequency control schemes to strengthen the “last line of defence” to help stop system-wide black-outs
  • makes networks responsible for maintaining a minimum level of system strength for each connected generator
  • requires new connecting generators to pay for remedial action if they would cause minimum system strength for other generators to be breached
  • foreshadows a new market-sourcing mechanism for inertia services and facilitates greater use of new technology like battery storage to back-up the system when something goes wrong.

“The NEM today is a far more complex interconnected system of renewable and non-renewable energy generation,” Mr Pierce said.

Technical parameters of the system need to be maintained as it transforms: inertia is necessary to absorb shocks that affect the frequency of the system; and the system has to be strong enough to keep voltage stable so generators can stay connected to the grid.

“The AEMC started this review as it became evident that different arrangements were needed by AEMO and transmission companies to secure the system stabilise the network as the changing generation mix accelerated.”

“The draft rule changes are focused on making sure the grid can continue to be operated securely and provide energy to consumers,” he said.

The package is consistent with the system security outcomes recommended by the Finkel review.

The AEMC will continue collaborating with AEMO and the Australian Energy Regulator to conclude consultation on the draft rules and implement the new framework for power system security.

Media contact details

AEMC Communication Director Prudence Anderson 0404 821 935 or (02) 8296 7817 –

AEMO Media manager 0409 382 121 and


  • How is reliability and security managed in the national electricity market?

To keep the lights on, the power system needs to be:

  • secure – able to operate within defined technical limits, even if there is an incident such as the loss of a major transmission line or large generator
  • reliable - have enough capacity (generation and networks) to supply customers.

The Australian Energy Market Operator (AEMO) is responsible for maintaining power system security and reliability in accordance with standards and guidelines, including those set by the AEMC’s Reliability Panel.

  • What is a secure power system?

The power system is in a secure and safe operating state if it is capable of withstanding the failure of a single network element or generating unit.

Security events are caused by sudden equipment failure (often associated with extreme weather or bushfires) that results in the system operating outside of defined technical limits, such as voltage and frequency.

  • What is a reliable power system?

A reliable power system has sufficient generation and network capacity to meet the consumer load in that region.

Reliability events are caused by insufficient generation or network capacity to meet consumer load.

Reliability events due to insufficient generation and interconnector capacity are usually predicted ahead of time by supply and demand forecasting. The associated consumer load shedding may be shared across parts of the NEM.

  • What is power system inertia?

The ability of the system to resist changes in frequency is determined by the inertia of the power system. Inertia is provided as a consequence of having spinning generators, motors and other devices that are synchronised to the frequency of the system. Historically, in the NEM, plentiful inertia has been provided by synchronous generators, such as coal and gas-fired power stations and hydro plant.

However, many new generation technologies, such as wind turbines and photo-voltaic panels, are not synchronised to the grid, have low or no physical inertia, and are, therefore, currently limited in their ability to dampen rapid changes in frequency.

  • What is the rate of change of frequency (RoCoF)?

The rate at which the frequency changes determines the amount of time that is available to arrest the decline or increase in frequency before it moves outside of the permitted operating bounds. AEMO may constrain the power system to reduce the size of a potential contingency and minimise the resulting initial frequency change. Alternatively, an increase in the level of inertia in the power system would permit the occurrence of larger contingencies for a given level of initial RoCoF.

  • What is system strength?

Non-synchronous generators do not contribute to system strength as much as synchronous generating units. System strength is a measure of the current that would flow into a fault at a given point in the power system.

Reduced system strength in certain areas of the network may mean that generators are no longer able to meet technical standards and may be unable to remain connected to the power system at certain times.

  • What is ride-through and why is it important?

The ability of generators and loads to withstand or ‘ride-through’ changes in frequency can influence the ability to maintain control of power system frequency following a contingency event. Generators and loads have a range of capabilities to withstand RoCoF. Generators and loads must also be capable of riding through network faults.

Generators that trip as a consequence of high RoCoF may exacerbate the disturbance to the system and lead to an even higher RoCoF by both contributing to the overall size of the contingency as well as reducing the level of inertia in the system.