Market Review: Completed
The transformation of the electricity sector is presenting both opportunities and challenges for system security, including for the management of power system frequency. The AEMC has conducted a comprehensive review of the market and regulatory frameworks that underpin frequency control in the NEM to determine whether they will remain fit for purpose in light of these opportunities and challenges. The review forms part of the AEMC’s ongoing system security work program, which aims to address risks to power system security as the electricity sector changes.
On 26 July 2018 the AEMC published a final report on the Frequency control frameworks review.
The report highlights several issues with the existing market and regulatory arrangements for frequency control, and makes recommendations on how they could be addressed. Specifically, the recommendations seek to:
- address the recent deterioration of frequency performance under normal operating conditions
- promote transparency of NEM frequency control performance and the competitiveness of the frequency control ancillary service markets
- remove inefficient barriers to the provision of essential frequency control services by new technologies.
These recommendations were developed in consultation with stakeholders. They represent the completion of this stage of the review and the action items assigned to the AEMC by the Finkel Panel in 2017.
The major deliverable of the final report is a work plan, developed collaboratively by the AEMC, AEMO and the AER, detailing actions to be taken by the market bodies, in consultation with stakeholders, to address the identified issues and to progress the recommendations referred to above.
The AEMC consulted extensively with stakeholders throughout the review process, including through the publication of an issues paper, progress update and draft report. These papers, and stakeholder submissions, are available below.
The AEMC established a Technical Working Group – comprising network service providers, generators, retailers, energy service providers, consumer representatives, AEMO and the AER – to provide technical advice on the issues under consideration.
The AEMC also established a Reference Group – comprising the Senior Committee of Officials, AEMO and the AER – to provide strategic advice on the review.
The AEMC will work closely with AEMO and other stakeholders, including through a continuation of the Technical Working Group, to progress the issues identified above through a longer-term, collaborative work plan. This work plan is set out in Chapter 4 of the final report, which is available below.