Market Review: Completed
The Reliability Panel’s 2020 Annual Market Performance Review (AMPR) provides observations and commentary on the reliability, security and safety performance of the power system over the period covering 1 July 2019 to 30 June 2020.
The final report also makes some comments on current and emerging trends and issues. The review is a requirement of the NER and is conducted in accordance with the terms of reference issued by the AEMC.
The annual review is becoming increasingly relevant as the power system faces a period of rapid transition, with the impacts of this transition already being noticed around the market.
It compiles information collected from a number of sources including the Australian Energy Market Operator, the Australian Energy Regulator, jurisdictional regulators and market participants.
As was the case last year, the Panel developed a data portal so that stakeholders can easily access the key data sets used in the report. Data portal can be accessed here
Market Performance Update
The Panel will now release a bi-annual market performance update to compliment the annual review and facilitate more dynamic engagement with key industry stakeholders. The updates aim to help market participants obtain more timely information about power system performance and about emerging trends in the areas of security, reliability and safety as early as possible.
The first market update covers the range of topics required for the annual review and some current and emerging issues, including the resilience of the power system to continued external events. The update also comments on overall and minimum demand over 2020 and particularly during the COVID-19 period.
The next market update and annual report will continue to cover these and other important issues as they emerge. The next market update is scheduled for second half of 2021
The purpose of review final report is to:
- Provide stakeholders with consolidated information and expert commentary about the performance of the power system and market in a single publication.
- Highlight emerging trends to help inform the policy and investment decisions of governments, policymakers, market institutions and market participants.
- Identify the issues for attention related to the frameworks or mechanisms used to deliver reliability, security and safety.
Key findings of 2020 review
- The reliability performance of the NEM has been satisfactory during 2019-20, with the regulatory framework, including its interventions, being leveraged to support reliable supply of electricity to customers. The Panel notes that there were a number of challenges to maintaining reliability over the reporting period, including extreme weather events such as extreme heat, bushfires and storms. The Panel will be reviewing reliability in depth during the 2021 Reliability Standard and Settings Review.
- The security performance of the NEM continues to be challenging as the power system transitions towards a generation fleet made up of smaller and more dispersed inverter-based resources. The NEM is at the global forefront of dealing with these issues and there is currently a program of work underway to address the challenges being faced.
- The safety performance of the NEM was satisfactory during 2019-20. The Panel is not aware of any incidents during the reporting period where AEMO’s management of the power system resulted in a safety issue with respect to maintaining the system within its relevant standards and technical limits.
In order to address the reliability challenges identified in the 2020 review, the Panel’s view is that learnings from the events of the 2019-20 financial year need to be factored into forward planning and reform processes. In particular, how the growth in unexpected and extreme events are considered in power system operations. It is important that the market is able to effectively respond to such events. The Panel also notes that the importance of forecasting in dealing with increasingly variable supply as penetrations of variable generation continue to grow.
The Panel will thoroughly consider the Reliability Standard and Settings in the review over the period of 2021, and notes that this process is likely to acknowledge the uncertainty surrounding the future management of reliability through the transition period.
In regard to power system security, the Panel’s view is that the continued and rapid uptake of distributed energy resources are providing challenges to system security. Similar to reliability, the rapid increase in uptake of roof top solar and the changes in consumer use of electricity is providing challenges for accurately forecasting supply and demand in the power system. The ongoing maintenance of security is a key focus for the Panel, particularly in the context of extreme events and minimum system load.
The Panel notes there are reforms occurring which aiming to address current and future system security issues, including the AEMC system security work program, as well as the ESB post-2025 market review. The Panel however will continue to assess and monitor system security as part of its future work, and will continue to work closely with the relevant bodies to influence the direction of this work.
The Reliability Panel
The Reliability Panel’s core functions relate to the security, reliability and safety of the national electricity system. The focus of the Panel’s work is on determining standards and guidelines which are part of the framework for maintaining a secure and reliable power system.
The Panel is chaired by AEMC Commissioner, Charles Popple. Its members are broadly representative of all stakeholders interested in the operation of the power system and the electricity market including consumer groups, generator, network service providers, retailers and the power system and market operator.
The Panel work program for 2021 includes the Reliability Standard and Settings Review. This review will be important in the context of the changing market and post-2025 market design work.