Rule Change: Open
On 2 July 2020, the Australian Energy Market Commission (AEMC) initiated consultation on a rule change request that proposes the introduction of two new market ancillary services for fast frequency response.
Stable frequency is an important part of maintaining a secure power system. Frequency varies whenever electricity supply does not exactly match consumer demand and uncontrolled changes in frequency can cause blackouts.
This rule change request is being considered as part of a wider Commission work program looking at new ways to deliver system services as the power system evolves.
Submissions on these rule changes close on 13 August 2020.
The rule change request
On 19 March 2020, the AEMC received a rule change request from Infigen Energy to introduce new ancillary service markets for fast frequency response (FFR) to efficiently manage power system risks associated with reduced system inertia.
The proposed markets for raise and lower FFR would operate similar to the existing market arrangements for FCAS.
Frequency control work plan
This rule change relates to our Frequency control work plan which sets out a series of actions that AEMO, the AEMC and the AER are undertaking to review and reform the frequency control frameworks in the national electricity market.
Other relevant system services rule change processes underway
The AEMC has seven rule change requests relating to the provision of system services.
Collectively, the AEMC refers to these rule requests as the ‘system services’ rule change requests and has published a single consultation paper seeking stakeholder feedback on the issues raised and the solutions proposed in each one.
These system services rule change requests 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-2020's. The AEMC is working closely with the ESB and the other market bodies as it progresses these rule change requests.
The AEMC has used the solutions proposed by each proponent to group the rule change requests into three timeframe-based "work streams" as a useful starting point for consultation. This will allow common issues to be considered more easily. These workstreams are:
Dispatch work stream which will consider proposed solutions where participants make short-term decisions between dispatch intervals to meet system needs, including:
- Fast frequency response market ancillary service (Infigen Energy)
- Primary frequency response incentive arrangements (AEMO)
Commitment work stream which will consider proposed solutions which involve committing or procuring the service ahead of the period for which there is a forecast need for it, including:
- Operating reserve market (Infigen Energy)
- Capacity commitment mechanism for system security and reliability services (Delta Electricity)
- Introduction of ramping services (Delta Electricity)
Investment work stream which will consider proposed solutions for the longer-term timeframes for building the new assets needed to provide system services, including:
- Efficient management of system strength on the power system (TransGrid)
- Synchronous services markets (Hydro Tasmania)
The AEMC's Investigation into system strength frameworks in the NEM (System strength investigation) will also be progressed alongside these system service rule change requests.
The AEMC has established these work streams, as a starting point for consultation. However, any new frameworks developed in response to the rule change requests will be focused on delivering the most efficient outcomes for consumers, having regard to outcomes across all time frames.