Ben Hiron 

Senior Adviser 

In response to a rule change request from Infigen Energy, the Australian Energy Market Commission is developing new market arrangements for the provision of fast frequency response services. These new services will help the system operator to control power system frequency as the electricity system transforms.  

Frequency control services are a subset of the Energy Security Board (ESB)’s essential system services market design initiative as part of its post 2025 market reforms. The rule change request from Infigen dovetails with the direction of this work. It provides us with an opportunity to complement some of the thinking and assessment done in the ESB work program, as well as technical input from the Australian Energy Market Operator (AEMO) through its Renewable Integration Study. 

What is frequency control? 

Frequency varies whenever electricity supply does not exactly match consumer demand and uncontrolled changes in frequency can cause blackouts. Small imbalances in supply and demand are common and easily accommodated in the system. However, larger imbalances can lead to significant frequency deviations. 

These larger imbalances are referred to as contingency events and include: 

• A large generator producing power experiences a fault and disconnects from the system, reducing the amount of power available. 

• A large industrial consumer experiences a fault and disconnects from the system, reducing the amount of power demand. 

• A large storm damages major transmission towers, preventing power from getting to where it needs to be. 

To avoid widespread system outages, power system frequency must be controlled within a pre-defined range around 50 hertz (Hz). If the frequency moves too far away from 50Hz, power system components including generators, loads and network elements may not operate correctly, and they may disconnect from the system as a self-protection mechanism. This disconnection of system elements can further de-stabilise the system frequency potentially leading to a cascading failure and potentially a black system. The 2016 black system event in South Australia is an example of such a cascading failure, caused initially by storm damage to transmission lines.  

The control of power system frequency during normal operation and following unplanned outages is achieved through the dynamic response of frequency sensitive generation and load. Frequency responsive plant respond to changes in system frequency to balance supply and demand in real time, similar to the way that a cruise control system works to automatically control the speed of a car on the freeway. A raise frequency response service is a service that provides increased generation or reduces the amount of load while a lower frequency service has the opposite effect. 

This balance between generation and demand is shown below. 

What are the existing arrangements to support frequency control?  

The national electricity market (NEM) includes arrangements for generators and loads to provide frequency control services to respond to changes in power system frequency. There are a range of frequency control services that are specified according to how quickly they can vary the power supplied or withdrawn from the power system. 

These services act together to rebalance supply and demand and stabilise system frequency following a disturbance. There are also automatic emergency frequency control schemes which provide a last line of defence to prevent system collapse following large unexpected contingency events. The frequency control arrangements for contingency events are shown in the figure below. 

The frequency control services act in combination with power system inertia to control power system frequency following disturbances. Inertia acts to resist changes in frequency due to sudden changes in supply and demand. 

Inertia is provided inherently by large spinning machinery associated with synchronous generators such as coal, hydro and gas-fired power stations.  

All things being equal, the more inertia in a power system, the easier it will be to ride-through some system disturbances and keep the power system going. A power system with more inertia means there is more time available for frequency control services to respond to a system disturbance.

The power system is changing 

The power system is in the process of changing from a system dominated by centralised coal- and gas-fired thermal generation to a system comprised of a diverse portfolio of behind-the-meter and grid-scale inverter-based energy resources as well as a more flexible demand side. One of the characteristics of the future power system is that there is expected to be much less inertia provided inherently by large spinning generation such as coal-fired steam turbines. 

This reduction in inertia presents operational challenges associated with maintaining a secure power system and controlling system frequency following contingency events. At lower levels of operating inertia, faster and/or more frequency control services are required to stabilise the system frequency within the existing system operating standards. In the absence of a change to the market arrangements, AEMO expects that increased quantities of fast, six second raise, service will be required to control power system frequency following contingency events under low inertia operating conditions.

However, the increased procurement of six second raise services is not expected to be an efficient frequency control solution for low inertia operation. Rather, it is expected that procurement of some quantity of faster responding service could meet the system need at lower cost.  

What is fast frequency response 

The term fast frequency response or FFR refers to the delivery of a rapid increase or decrease by generation or load in a time frame of two seconds or less, as opposed to the six second timeframe for the existing fast services. As noted above, faster frequency response is expected to become more valuable in the future during periods of reduced system inertia.  The faster response is able to quickly rectify a mismatch between supply and demand, which in turn helps in managing power system frequency. FFR is a relatively new technology that can be offered by inverter-based technologies such as wind turbines, solar photovoltaic (PV) panels, batteries and demand-side resources such as home batteries and roof-top solar panels combined with home energy management systems. 

It is not expected that FFR will remove the need for physical inertia on the power system. Rather the provision of FFR will provide an additional tool to help control system frequency during periods of lower inertia operation. 

What are we doing? 

The AEMC is working with the ESB, AEMO and the Australian Energy Regulator (AER) to develop market arrangements to procure fast frequency response (FFR) services. The ESB has noted that development of spot-market arrangements for provision of FFR is preferred. The AEMC consider that this will encourage efficient investment and operation of the power system as it evolves.  

In particular, the AEMC’s work builds on work undertaken by AEMO in its 2020 Integrated System Plan (ISP), which forecasts that power system inertia levels will continue to decline as more inverter-based generation plant connect to the power system and existing synchronous plant progressively retire. In addition, AEMO’s Renewable Integration Study Stage 1 report confirms Infigen’s view that more and faster frequency responsive contingency reserves are required to keep the power system secure under reduced inertia operation. 

The AEMC published a directions paper on this rule change in December 2020. The directions paper sets out the Commission’s preliminary views on policy options for FFR arrangements. Key questions remain including: 

1. What option is preferred to implement provision of FFR — re-tasking of existing market arrangements to support the procurement of FFR services or are new market arrangements to procure FFR required? 

2. Consideration of whether to value inertial response through FFR arrangements and/or a separate inertia market mechanism? 

The Commission will publish a draft determination for the Fast frequency response market ancillary service rule change by 22 April 2021. The draft determination will be informed by technical advice from AEMO and stakeholder submissions. Further information and documentation is available at the project page.