The Australian Energy Market Commission today released a draft report with recommendations to help address deteriorating frequency performance in the electricity grid at the least cost.

The need to manage increasing instability in the power system is highlighted in the AEMC Reliability Panel’s annual review of the security, reliability and safety of the national electricity market, also released today.

The Reliability Panel’s latest report for 2016-2017, shows that managing the power system – by keeping things like frequency and voltage within technical limits - is becoming more challenging. Last year the power system dropped outside secure technical limits for more than 30 minutes on 11 occasions, including South Australia’s system-wide blackout, compared with seven in 2015-2016 and four in 2014-2015.

AEMC Chief Executive Anne Pearson said this report underlines the importance of the Commission’s plan to secure the power system.

“The good news is there’s enough generation and demand response capacity in the power system over the short and medium term.

“But with more weather-driven generation, and more coal-fired generation leaving, the technical characteristics of the grid are changing,” Mrs Pearson said.

The AEMC recently introduced a package of new tools to help the market and system operator, AEMO, address the immediate system security issues resulting from the changing energy mix. These included requirements for networks to provide minimum levels of inertia and system strength, and new ‘last line of defence’ schemes to help AEMO better prepare for, and respond to, a system security emergency.

Mrs Pearson said the Commission had already put in place a range of new tools that can be used by the market operator to keep supply secure and flagged a number of new initiatives set to be proposed in coming months.

“It is not well understood that while we have a good supply of available power, which makes the system reliable, there is a separate problem of maintaining security or the stability of the power system including when unexpected breakdowns happen in the system,” she said.

“Through the frequency control review, the AEMC is focussing on this area to address the energy network’s transformation into a system with a mix of synchronous and non-synchronous energy sources. New security measures will help integrate those new generation sources.”

“The power system has to be managed differently in response to the changing generation mix.”

Mrs Pearson said some 10 major steps had already been taken to tighten security arrangements and put more tools in the hands of the operator under the AEMC’s system security and reliability action plan, with another four major reviews of policy upcoming in 2018. In addition to this work we are progressively making other rules to support this new framework, she said.

Today’s draft recommendations for frequency control add to AEMO’s toolkit.

Proposed changes include incentives for generators to use their equipment more effectively to keep frequency within safe limits, and the harnessing of new technologies like batteries and wind farms to help control frequency in the medium term.

“The technology revolution has increased innovative generation and demand response capacity across the nation, with wind, solar and household storage now well-established,” Mrs Pearson said.

“Our recommendations to restore good frequency performance are about developing specific, targeted solutions to keep the lights on and secure the future for renewables and other technologies that reduce emissions, at the least cost to consumers.”

Stakeholders are encouraged to provide feedback on recommendations in the AEMC’s frequency control review draft report which.

More detailed recommendations include:

  • improved incentives for generators to respond to frequency fluctuations
  • market development options to promote investment in emerging technologies that can provide least-cost frequency control services
  • the Australian Energy Market Operator (AEMO) to undertake monitoring and publish regular reports on frequency performance
  • the Australian Energy Regulator (AER) to monitor and report on the performance of the frequency control services markets.

Frequency control frameworks review draft report submissions are due by 24 April 2018.

Annual market performance review 2017 project page

Frequency control frameworks review project page


Prudence Anderson 0404 821 935 or (02) 8296 7817

Bronwyn Rosser 0423 280 341 or (02) 8296 7847

About the Reliability Panel

Reliability Panel members represent a range of participants in the national electricity market, including consumer groups, generators, network businesses, retailers and the Australian Energy Market Operator (AEMO). The Reliability Panel, which forms part of the AEMC’s institutional arrangements, determines standards and some of the guidelines used by AEMO and participants which help to maintain a secure and reliable power system for consumers.

About the annual market performance review

The Reliability Panel’s annual market performance review provides observations and commentary on the security, reliability and safety of the national electricity market. It compiles information collected from a number of sources including the Australian Energy Market Operator, the Australian Energy Regulator, jurisdictional regulators and market participants.

This annual review is one of the main functions of the Reliability Panel, as set out in the National Electricity Law. Among other things, the annual market performance review may assist governments, policy makers and market institutions to monitor the performance of the power system, and to identify the likely need for improvements to the various measures available for delivering reliability, security and safety.