The AEMC is recommending a range of new mechanisms to better manage risks to grid stability.  

The increasing frequency and duration of extreme weather events, along with the changing nature of the generation fleet and rapid growth in consumer-owned distributed energy resources, is creating new challenges to the resilience of the power system. 

In a final report on Mechanisms to enhance resilience in the power system released today, the AEMC has recommended a range of changes to the power system’s security framework to help the market operator, AEMO, manage the risks of extreme events including severe storms. 

AEMC Acting Chief Executive Suzanne Falvi said that the report makes a number of recommendations to manage these risks moving forward.

“The AEMC intends to work closely with AEMO and the ESB in developing the rule changes recommended to enhance the resilience of the power system,” said Ms Falvi.

The report proposes a new annual review by AEMO to identify all emerging risks to the power system in six key areas: frequency, voltage, inertia, system strength, the prevalence of distributed energy resources, and the operation of special protection schemes. The risks identified through the annual review would then be addressed by transmission and distribution businesses in their formal planning processes, and would also inform AEMO’s Integrated System Plan.

The report also proposes a new way of managing “indistinct” risks to reflect of the changing power system. Today, there are many more smaller generators dispersed throughout the system, as well as significant numbers of household rooftop solar and batteries, with variable output depending on the amount of wind and sunshine. This means there can be more rapid and unexpected changes in generation, which need to be managed. 

To help AEMO better manage this uncertainty and address these indistinct risks, we recommend introducing a new “protected operation” tool that would enable AEMO to take proactive, cost-effective actions.

A third key recommendation is for a new general provision in the rules to give AEMO the flexibility to prioritise system security obligations while the spot market is suspended. This occurs when the market cannot operate as normal, for example following the a ‘black system event’.  

The Commission has prepared suggested rule change requests to progress the recommendations made in the review. Together, the changes will make the system security framework: 

  • broader – enabling AEMO to consider a wider range of extreme events 
  • faster – streamlining the process for AEMO to identify risks and take proactive steps where cost-effective 
  • more flexible – enabling AEMO to respond to extreme risks to the power system which were not foreseen in its annual risk review.

The final report also maps out an ongoing work program on power system resilience to meet future challenges. Working in partnership with the Energy Security Board, AEMO, industry, governments, consumer groups and other stakeholders, as well as the review’s technical working group, we will progress a package of projects to complement the extensive work already underway to secure the system. 

Issues to be considered through the work program include:

  • investigating how best to manage indistinct risks during normal operating conditions
  • enhancing network planning processes so network businesses have more resilient networks 
  • strengthening power system security standards for a more resilient system.

Media: Kellie Bisset, Media and Content Manager, 0438 490 041; (02) 8296 7813


Work already underway to address power system resilience

The Energy Security Board’s post-2025 market design review is considering the long term reforms needed to market design to account for the rapid changes in the national electricity market. This includes consideration of the need for new security services as well as ways to deal with increased generation variability.

The Energy Security Board is developing a plan to put AEMO’s integrated system plan into action. Together with the AEMC’s reforms to improve the coordination of investment in generation and transmission, this work will help increase the interconnection of the power system, which can help the system avoid, survive and recover from extreme events.

The AEMC is currently considering two rule change requests from AEMO and the Australian Energy Regulator that propose a number of changes to the frameworks for system restart following a black system event. A draft determination is due in December 2019.

In 2017 the AEMC made new rules to improve system strength and inertia conditions by placing obligations on network businesses to remedy system strength and inertia shortfalls identified by AEMO. The AEMC’s system strength and interventions review is checking in on that reform package to see if the new rules are still optimally targeted given the speed of change underway. 

Through the AEMC’s frequency control work plan, we are designing new, coordinated and lowest-cost ways to deliver frequency control services over the medium to longer term. This includes working with AEMO on short-term changes to manage frequency deterioration. As part of this, we are working on rule change requests that consider ways to encourage generators to provide frequency control responses.

The Energy Security Board is currently coordinating a work program across AEMO, the AER and the AEMC on the integration of distributed energy resources. A key element of this work program is for AEMO to develop the technical standards for distributed energy resources, including the requirements for distributed energy resources to be capable of remaining connected and contributing to the stability of the system during disturbances. 

Mechanisms to enhance resilience in the power system - review of system black event in South Australia of 28 September 2016

This is the final report for the AEMC’s Mechanisms to enhance resilience in the power system −  review of the system black event in South Australia.

COAG Energy Council’s terms of reference for the review require the Commission to draw upon AEMO and AER’s findings into the black system event. With the publication of both the AEMO incident report (in March 2017) and the AER pre- and post-event compliance report (in December 2018) the Commission started its review in April 2019 as required by COAG Energy Council.

The AEMC considered systemic issues arising from the South Australian black system event including:

  • contingency classification and the pre-event management of risks to power system security
  • system restoration following the black system event
  • market suspension, and
  • arrangements to enhance power system resilience to high impact low probability events.  

In considering these issues, the AEMC took a forward-looking approach: we used the learnings of the system black event to identify least-cost ways of managing the risks of a changing power system.

On 7 August 2019 the AER commenced legal proceedings in respect of market participant compliance during the black system event period. As legal proceedings are currently underway, the Commission did not consider specific issues arising during the period between the loss of the transmission lines in South Australia's mid north and the occurrence of the black system condition. The review only looked at specific matters in respect of the pre- and post-stages of the event.