Rule Change: Open
The Commission has made a more preferable draft rule (the draft rule) in response to a rule change request from TransGrid. This draft rule proposes changes to the National Electricity Rules (NER) to deliver an evolved framework for system strength. It is consistent with the ESB’s Post 2025 work.
This draft rule is designed to deliver needed system strength in the system. It forms part of a suite of tools required to keep the power system stable and secure as it decarbonises. System strength is a critical service that supports inverter based resources (IBR), such as wind and solar generation, as well as batteries, which are rapidly becoming a key part of the national electricity market (NEM) generation mix.
On 15 July 2021 the Commission extended the period of time for making the final rule determination to 21 October 2021 under section 107 of the NEL. This extension was made to allow the Commission sufficient time to analyse and consult on stakeholder submissions made to the draft rule determination, reflecting the complexity of the issues involved.
Draft rule determination
The draft rule proposes three main elements, which we have described as being relevant to the supply, coordination and demand for system strength:
- Supply side: System strength services will be supplied through a TNSP led procurement of system strength. TNSPs, working closely with AEMO, would be responsible for providing efficient levels of system strength on a forward looking basis over the given timeframe. The TNSP would provide system strength as a prescribed transmission service, with the TNSP required to meet a system strength planning standard at certain locations on its transmission network.
- Coordination: The system strength mitigation requirement, which would provide connecting parties with IBR a choice between paying to use the system strength provided by the TNSP or providing their own system strength by remediating their impact. This mechanism would mean that while customers would bear some of the initial cost of providing system strength services, over time this cost will be recovered from connecting parties.
- Demand side: New access standards, to ensure that connecting parties with IBR would only use the efficient volumes of this valuable common pool resource. The new access standards also underpin the coordination measures, by allowing generators to undertake actions to reduce the amount of system strength they require.
Stakeholders submissions to the draft determination and rule were due on 17 June 2021 and can be found below.
Rule change request
On 27 April 2020, TransGrid submitted a rule change request to amend the National Electricity Rules regarding the provision of system strength in the NEM.
The request proposed to abolish the ‘do no harm’ obligation and amend the minimum system strength requirements. This was intended to provide system strength in the NEM in a more proactive manner, to maintain a secure power system, and to provide additional levels of system strength to streamline the connection of new non-synchronous generators.
TransGrid’s rule change is one of seven rule change requests the AEMC commenced consultation on through the System services consultation paper. Submissions to the consultation paper were due on 13 August 2020 and can be found below.
On 24 September 2020 the Commission extended the period of time for making the draft determination to 24 December 2020 under section 107 of the NEL. On 10 December 2020 the Commission further extended the period of time for making the draft determination to 29 April 2021 under section 107 of the NEL. This extension was made to allow the Commission sufficient time to develop and consult on how the system strength frameworks should be evolved, reflecting the complexity of the issues involved.
The Commission also released the reasoning behind a rule not being made within a year of the initiation of the rule change request on 17 June 2021. This s108A report is provided below.
Other relevant system services rule change processes underway
The AEMC has seven rule change requests relating to the provision of system services that it is currently assessing.
These system services rule changes complement and are interdependent with the work of the Energy Security Board (ESB) to develop advice on a long-term, fit-for-purpose market framework to support reliability that could apply from the mid-2020s. They provide an opportunity to action matters that are more urgent in nature. The AEMC is working closely with the ESB and the other market bodies as it progresses these rule change requests.
We are considering the interactions between issues raised in the different rule changes so that any new frameworks developed in response to the rule change requests will be focused on delivering the most efficient outcomes for consumers. This is particularly relevant to the following rule changes, which interact with the evolved framework developed in this rule change request from TransGrid:
- Capacity commitment mechanism for system security and reliability services (submitted by Delta Electricity)
- Synchronous services markets (submitted by Hydro Tasmania)
|Draft rule determination||Draft rule – amending rule format|
|Draft rule – mark up format||Information sheet|
|Statutory notice – s 99||Webinar briefing materials – slides|
|Section 108A notice||Statutory notice - s 107|
|Consultation paper||Information sheet|
|Notice||Stakeholder submissions template|
|S107 notice||Notice of extension - draft determination|