Rule Change: Open
On 19 November 2019, Hydro Tasmania submitted a rule change request to amend the National Electricity Rules to create a market for “synchronous services". These synchronous services include inertia, voltage control and fault level/system strength.
Hydro Tasmania proposed to address the shortage of “inertia and related services” in the national electricity market (NEM) by integrating the dispatch of a “synchronous services” with the existing energy and FCAS spot markets.
Hydro Tasmania proposed to do this by changing the formulation of the constraints that are applied to the NEM dispatch engine (NEMDE). Hydro Tasmania proposed that these reformulated constraints would allow the dispatch engine to find the lowest overall cost combination of synchronous services and non-synchronous generation. This in turn is expected to deliver lowest overall costs for consumers.
Hydro Tasmania’s rule change is one of seven rule change requests the AEMC was consulted on through the System services consultation paper (the 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 timeframe to make a draft determination until 25 March 2021. This extension will enable us to better align the work with the ESB’s market design project and prioritise more urgent system security issues. The ESB’s thinking and assessment undertaken as part of its Scheduling and ahead mechanisms and Essential system services market development initiatives will inform the approach to this rule change.
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. Collectively, the AEMC refers to these rule requests as the “system services” rule change requests.
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.
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.
The AEMC will be making draft determinations for each of the rule change requests over the coming year prioritising more urgent system security issues while continuing to coordinate with ESB work and seek key technical input from the Australian Energy Market Operator (AEMO).
More information on each of the system services rule changes can be found at the links below:
- Fast frequency response market ancillary service (Infigen Energy)
- Primary frequency response incentive arrangements (AEMO)
- Operating reserve market (Infigen Energy)
- Capacity commitment mechanism for system security and reliability services (Delta Electricity)
- Introduction of ramping services (Delta Electricity)
- Efficient management of system strength on the power system (TransGrid)
- Synchronous services markets (Hydro Tasmania)