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 proposes to address the shortage of “inertia and related services” in the national electricity market (NEM)by integrating the dispatch of a “synchronous service” with the existing energy and FCAS spot markets.
Hydro Tasmania propose to do this by changing the formulation of the constraints that are applied to the NEM dispatch engine (NEMDE). Hydro Tasmania proposes 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 is currently consulting on through the System services consultation paper. It is also being progressed alongside the AEMC’s Investigation into system strength frameworks in the NEM. See below for more details.
Submissions to the consultation paper are due on 13 August 2020.
Other relevant system services rule change processes underway
The AEMC has received seven rule change requests relating to the provision of system services.
Collectively, the AEMC refer 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 the rule change requests where the solution proposed involves co-optimising services as part of the dispatch process with participants making short-term inter-temporal 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 the rule change requests where the solution proposed involves committing or procuring the service ahead of the period for which there is a forecast need for the service, 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 the rule change requests where the solution proposed involves services that would be procured more than a few months ahead of the period it is needed, 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.
While the rule change requests are grouped this way for initial consideration, 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.