Market Review: Completed
On 12 December 2019 the AEMC published a final report on Mechanisms to enhance resilience in the power system (Review of the black system event in South Australia).
The report includes several recommendations that are designed to enhance the resilience of the power system. We have proposed to:
- give AEMO greater flexibility to protect the system from severe disturbances, such as major storm systems that threaten an entire region
- create a new risk review process, to allow AEMO, networks and market participants to work together to identify new risks and develop solutions
- provide AEMO with flexibility to prioritise system security actions during a period of market suspension.
The report includes potential rule change requests for each of these recommendations. We will work with stakeholders to progress these rule change requests in 2020.
The COAG Energy Council asked the AEMC to review the factors which contributed to the "black system" event experienced in South Australia on 28 September 2016. The AEMC’s review is a forward-looking assessment of what changes to NER frameworks are needed to manage new risks faced by the power system.
The review has drawn on what has been learned since the South Australian black system event in 2016, to identify any systemic changes to National Electricity Rules (NER) frameworks that need to be made.
The final report identifies a need to introduce new operational tools for enhancing power system resilience. These operational tools are needed to enhance to manage the risks from 'indistinct' events.
The review presents detailed recommendations for changes to NER frameworks for power system security in the following three areas:
- Implementing a General Power System Risk review (GPSR) process is recommended to effectively identify emerging risks to power system from all sources.
- Introduction of ‘protected operation’ is recommended as a new operational tool for AEMO to enhance the resilience of the power system to indistinct events that are associated with abnormal conditions.
- Clarifying the applicability of rule arrangements during a period of market suspension. The review also recommends clarifying the applicability of rule arrangements during a period of market suspension
The final report includes suggested rule change requests to assist stakeholders develop rule change requests to implement the recommendations made in the review.
The review also recommends a future work program investigating further approaches for enhancing power system resilience. The AEMC intend to work closely with AEMO and the Energy Security Board in implementing this future workstream.
On 15 August 2019 the project team published a discussion paper on how to better manage security risks in a changing power system.
The discussion paper considers key policy areas including:
- treatment of uncertainty from variable generation
- mechanisms to provide increased resilience to high impact, low probability events.
13 stakeholder submissions were received in response to the review’s discussion paper and can be found below.
Technical working group
The Commission convened a technical working group to provide feedback on policy options presented in the discussion paper. This group included representatives from the South Australian government and network businesses, the AER and AEMO, consumer representatives as well as industry representatives nominated by the Clean Energy Council, Australian Energy Council and Energy Networks Australia. The technical working group met on 16 August 2019. Meeting minutes are available below.
Issues and approach paper
On 18 April 2019 the Commission published an issues and approach paper to facilitate stakeholder feedback on the systemic issues arising from the SA black system event and the Commission’s approach to the review. The issues and approach paper, along with submissions, can be found below.
South Australia experienced a ‘black system’ event at 16:18 AEST on Wednesday 28 September 2016 (the event). Approximately 850,000 South Australian customers lost electricity supply including households, businesses, transport, community services, and major industries.
The COAG Energy Council’s terms of reference require the Commission to build on AEMO’s and the AER’s findings regarding the black system event. With the publication of both the AEMO incident report and the AER pre- and post-event compliance report by December 2018, the Commission commenced its review as required by COAG Energy Council in January 2019.
On 7 August 2019 the AER commenced legal proceedings in respect of market participant compliance during the black system event period. As legal proceedings are currently underway, the Commission is not considering specific issues arising during the period between the loss of the transmission lines in South Australia's mid North and the occurrence of the black system condition. This review is only considering matters in respect of the pre- and post-stages of the event