The Australian Energy Market Commission (AEMC) today released a package of final rules to guard against technical failures that lead to cascading blackouts.

Together with new rules made in March 2017 that strengthen ‘last line of defence’ frequency control schemes, this package of rule changes addresses risks to energy security created by the power system’s changing generation mix.

AEMC Chairman John Pierce said the new rules are essential to supporting market transformation, as more non-synchronous, lower emission generators like wind and solar come in, and synchronous generators like coal retire.

“As the power system continues to evolve, these rule changes will deliver the necessary inertia into the system for frequency control. They will also require networks to provide a minimum level of system strength to help keep the system stable,” Mr Pierce said.

“These new rules are designed to provide confidence in the security of the system at least cost to consumers.”

The new rules involve AEMO and the networks implementing solutions together, and align with recommendations in the Finkel review. The rules:

  • make networks provide minimum levels of inertia when inertia shortfalls are identified by AEMO
  • enable networks to contract with suppliers of inertia substitutes like fast frequency response services from emerging technologies like batteries, when providing these minimum levels (where AEMO agrees)
  • give AEMO more tools to increase inertia and help keep frequency in required operating bands
  • make networks provide the services necessary to meet minimum levels of system strength at key locations when shortfalls are identified by AEMO
  • require new connecting generators to pay for remedial action if they are going to negatively impact on minimum system strength levels
  • make generators and networks provide more detailed information about how their equipment performs to help AEMO manage the changing power system
  • allow AEMO to request data from generators and networks to assess if remedial action is needed for system strength.

In addition to these essential, short-term steps to provide confidence that the power system is secure, the AEMC is continuing to implement a new framework for power system security:

  • our Frequency control frameworks review is looking at how best to integrate distributed energy resources like batteries, new fast frequency control services and demand response to help keep the system secure
  • we are considering new ways for the market to deliver more inertia where this provides additional benefits to the system
  • we are reviewing technical performance standards for connecting generators and the process for negotiating those standards

While a secure power system is essential to deliver energy to consumers, the system also needs to be reliable - that is, have generation capacity, demand response capability and network capacity, to meet consumer demand.

In tandem with our system security program, the AEMC is undertaking a system reliability program, which includes the  Reliability frameworks review, and the Reliability Panel is reviewing  the reliability standard and market price settings. 

The Reliability frameworks review is  considering a range of fundamental changes to market design to improve the ability of the market to deliver more capacity, and capacity valued by the power system, when it is needed – both in the short and longer term.

“In particular, we’re looking at how to address the variability of renewable generation to make it firmer or dispatchable, but in a way that minimises costs for consumers and also supports much needed private sector investment in the electricity sector, which is estimated to be in the billions,” said Mr Pierce. 

The AEMC’s progress reports on both the Reliability frameworks review and the Frequency control frameworks review are due in December 2017. 

Media contact details

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

Explainer of technical terms

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. It’s about having enough electricity generation and demand response to meet consumer demand.

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.

Review of the reliability standard and reliability settings

Under the National Electricity Rules, the AEMC’s Reliability Panel is required to carry out reviews of the reliability standard and reliability settings every four years.

This regular review allows the Panel to take into account any changes in market arrangements and consider whether the reliability standard and reliability settings remain suitable, or whether changes should be made to ensure these mechanisms continue to meet the requirements of the market, market participants and consumers.

The review is currently underway and includes extensive consultation with stakeholders. In accordance with the rules, the review must be completed by 30 April 2018.

Media: Communication Director, Prudence Anderson 0404 821 935 or (02) 8296 7817

19 September 2017