The Reliability Panel’s (Panel) FY2023 Annual Market Performance Review (AMPR) summarises and provides analysis on the reliability, security, and safety performance of the power system across the 2022–23 financial year.

Final report observations

This year’s market performance review found that, over the 2022-23 Financial Year (FY2023), the reliability, security and safety performance of the National Electricity Market (NEM) were within acceptable levels. However, continued investment in power system resources is needed to address risks to the future outlook. 

Reliability

The Panel's assessment in the FY2023 AMPR shows that:

• There was no breach in either the reliability standard or the interim reliability measure in FY2023. However, the latest 10-year reliability forecasts from the ESOO indicated risks to maintaining medium to long-term reliability.
• The number of lack of reserve (LOR) notices issued in FY2023 continued an upward trend from previous financial years, suggesting increased variability in reserve levels forecasts. While project announcements were increasing, the rate at which announced projects progressed to commissioning was low. Investment certainty will be important to ensure the future reliability of the system and the Panel will continue to monitor the rate at which projects transition from anticipated to committed projects.

Security 

The Panel found that security performance in the NEM was acceptable in the reporting period. The Panel notes:

• The number of system incidents remained steady from FY2022 levels. System costs were steady in FY2023. This reflected fewer reliability and emergency reserve trader (RERT) activations, and stable network support and control ancillary services (NSCAS) and system restart ancillary services (SRAS) procurement costs, when compared with FY2022.
• An upward trend in the number of security directions issued and reclassification events in the NEM over several financial years.
• Increased climate variability could lead to more market events and continue to pose an ever increasing threat to maintaining system security within acceptable levels in the future.

Looking forward, the Panel also notes that the recently updated transitional security frameworks should help address security concerns in the NEM as it transitions.

Safety 

The Panel notes that there were no incidents in FY2023 where AEMO’s management of power system security resulted in a safety issue and no instances where AEMO issued a direction and the directed participant did not comply on the grounds that complying with the direction would be a hazard to public safety, or materially risk damaging equipment or contravene any other law.

Key Events 

While FY2023 experienced fewer shocks than FY2022, there were a number of key events in the reporting period, including: 

• Two major Supervisory Control and Data Acquisition (SCADA) related outages on 17 March 2023 and 28 April 2023 that led to market suspensions in New South Wales and Victoria.
• Severe weather events on 12 November 2022 in South Australia that damaged the Heywood interconnector, resulting in South Australia being islanded from the NEM for a total of 7 days.
• The introduction of the very fast raise and very fast lower frequency control ancillary service (FCAS) markets on 9 October 2023 which have shown early signs of lowering FCAS costs.

The Panel is interested in stakeholder feedback on the revised format for FY2023 AMPR.

The FY2023 AMPR has been published as a chart pack with targeted commentary to provide a more visually impactful and digestible report. 

The Panel is interested in stakeholder feedback on the format and content of future AMPRs. While there is no dedicated consultation period for this report, stakeholders are welcome to provide feedback via email to panel@aemc.gov.au by 30 September 2024. 

Background 

The AMPR provides an assessment of reliability, security, and safety outcomes relevant to the NEM undergoing rapid transition. 

The report compiles information collected from a number of sources including the Australian Energy Market Operator, the Australian Energy Regulator, and market participants.

The purpose of the review final report is to:

• consider specific events that have occurred in the NEM over the reporting period
• assess the performance of the power system against various reliability, security, and safety measures
• consolidate key information related to the performance of the power system and present observations and commentary in a single publication for the purpose of informing stakeholders.

About 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 that are part of the framework for maintaining a secure and reliable power system.

The Panel members broadly represent the stakeholders interested in the operation of the power system and the electricity market including consumer groups, generators, network service providers, retailers and the power system and market operator.

Key dates for this review

• Review initiated: 25 April 2024 
• Explanatory statement publication: 27 June 2024
• Final report publication: 27 June 2024