Rule Changes: Open

Declaration of Lack of Reserve conditions

Reference:
ERC0226
Stage:
Consultation on Draft Determination
Proponents:
AEMO
Project Leader:
Sarah-Jane Derby
Date initiated:
22-Aug-2017
Overview

On 17 October 2017, the AEMC published a draft rule and draft determination on the Declaration of Lack of Reserve conditions rule change request. Submissions to the draft determination are due by 28 November 2017.

On 17 October 2017, the AEMC published a draft rule and draft determination on the Declaration of Lack of Reserve conditions rule change request. Submissions to the draft determination are due by 28 November 2017.

The draft rule promotes short-term reliability in the NEM by modifying the existing framework for the declaration of lack of reserve (LOR) conditions to be more flexible, sophisticated and transparent.

AEMO has also published its draft guidelines alongside this draft determination. Submissions on the content of the guidelines should be sent to AEMO by 14 November 2017.

To summarise:

  • Submissions on the draft rule, including the provisions relating to the framework and requirements for the guidelines (that is, the contents of the NER) should be sent to the AEMC.
  • Submissions on the content of the guidelines should be sent to AEMO.
Overview of the draft rule

The draft rule will introduce a more flexible way for AEMO to declare lack of reserve conditions, allowing the system operator to move from the current contingency-based deterministic approach, to one that is probabilistic, while also maintain the transparency of the existing framework. The draft rule is largely as proposed by AEMO with a number of amendments to address stakeholders’ concerns, including the introduction of a more comprehensive consultation process.

The key features of the draft rule are:

  • the removal of the three levels of contingency-based LOR definitions descriptions from the NER and replacement with a high-level description of lack of reserve condition
  • the introduction of an obligation for AEMO to develop and publish reserve level declaration guidelines that set out how AEMO will determine a lack of reserve condition
  • minimum requirements for the guidelines, including obliging AEMO to declare at least three probability levels to be called LOR1, LOR2 and LOR3
  • the introduction of the factors that AEMO must take into account when assessing how to declare an LOR
  • a requirement for AEMO to use an amended version of the rules consultation procedures when amending the guidelines.
Background

On 1 August 2017, the AEMC received a rule change request from AEMO to amend the NER in relation to the definitions of LOR conditions in the NER. AEMO considers that the current definitions of LOR levels are no longer appropriate for identifying risks in the power system, and so it is seeking to replace these with a system triggered by a wider range of risks than those presently allowed for in the definitions.

A consultation paper was published on 22 August 2017 to facilitate discussion on the rule change request. Submissions closed on 19 September 2017.  The AEMC received 13 submissions to the consultation paper.

The AEMC held a stakeholder workshop on 5 October 2017. In the workshop, AEMO provided summary of the background and problem to the rule change request, its proposed solution, and an update on its project development. Slides for the workshop are available on this page.

Key dates for this rule change

In its rule change request, AEMO noted that it desires to have this rule in place this summer to enable the LOR framework to immediately benefit from this tool.

The Commission recognises the importance of making a final determination for this rule change request by summer. However, the nature of the proposed changes in this request is such that the Commission considers industry should have sufficient opportunity for consultation. Accordingly, the Commission is assessing this rule change request through the standard timeframe, but treat it as a priority.

Given the nature of the proposed changes, the timeframes that stakeholders have to consider and respond to the matters will stay the same as those used under the standard rule making process.

The key dates for stakeholders in this process are:

  • Commencement of this rule change process: 22 August 2017
  • Submissions to the consultation paper to be received by (4 weeks): 19 September 2017
  • Stakeholder workshop: 5 October 2017
  • Publication of draft determination: 17 October 2017
  • Submissions to the draft determination to be received by (6 weeks): 28 November 2017
  • Publication of final determination: 19 December 2017
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