Rule Change: Completed
Overview
On 9 October 2025, the Australian Energy Market Commission (AEMC) made a final determination to not implement a new real-time market for inertia. This is in response to a rule change request submitted by the Australian Energy Council that sought to implement a new ancillary service spot market for inertia.
Our analysis found that the benefits of operationally procuring inertia would be outweighed by the upfront and ongoing costs of designing, implementing and operating a new market.
Additionally, expected inertia supply will greatly exceed minimum requirements over the foreseeable horizon, due to work already underway to meet system strength requirements. Recent system security reforms from the Improving security frameworks for the energy transition rule change will deliver benefits and need time to play out before making significant changes to the existing inertia framework.
Our decision to not implement a new real-time inertia market now will not hinder future development of a new market, if one is deemed to be beneficial. Technical work that would be required to underpin efficient operational procurement is already progressing, such as advancements in real-time inertia measurement or refinements to quantifying synthetic inertia provision from grid-forming inverters.
To ensure we do not miss out on potential benefits in the future, the Commission has committed to amending the Terms of Reference for the Reliability Panel’s annual Reliability and Security Report. The Panel will monitor inertia-related metrics to identify when operational procurement of inertia could become beneficial in the future.