Market Review: Completed
On 12 April 2012 the Reliability Panel (Panel) made its final determination of the system restart standard (standard) that would apply for the acquisition of system restart ancillary services (SRAS) by the Australian Energy Market Operator (AEMO). As with the draft standard, the final standard largely retains key aspects of the interim standard that was published by AEMO in 2006 (as available on the AEMO website and also published below under ‘initiation’). The final standard incorporates some minor amendments to the draft standard (and interim standard) to improve clarity. The standard will apply from 1 August 2013.
SRAS are ancillary services that provide energy to allow power stations to be restarted and connections to be re-established following a major supply interruption in which power stations are disconnected from the power system. Under the Rules, the Panel is required to determine the system restart standard (standard) which would set out the requirements that are to be met by AEMO in acquiring sufficient SRAS for the national electricity market (NEM). The Rules also provide that AEMO was to determine an interim standard that would apply until such time as the Panel determines the standard. The Panel notes that an interim standard has been in place since November 2006.
Ensuring there is sufficient SRAS is an important consideration for the NEM. In the event of a major supply interruption such that a ‘black system' condition were to occur where large proportions of the market are disconnected, most generating units could be expected to shut down. Such a condition would likely cause significant disruption to businesses and the broader community. To restore the power system after a black system event, would be a highly complex and technical task that would require the coordination of many parties in the NEM including AEMO, network service providers, generators and customers. As most generating units require a source of electrical power to restore their auxiliary plant and restart, SRAS provides the services that would enable generators to start up, which would then allow power to be progressively restored to the whole system.
The system restart standard sets the ‘benchmark' for the requirements and procurement of SRAS. The benchmarks specifically relates to the services which allow energy to be supplied (and a connection to be established) sufficient to initiate the process of restarting the power system following a major disruption. The system restart standard does not define or specify any operational procedures to be followed by AEMO or market participants in the event of a black system condition.
In September 2011, the Panel received terms of reference from the AEMC to carry out a review to determine the system restart standard. On 4 November 2011, the Panel published an Issues Paper providing some background to the relevant matters and outlining specific questions to facilitate consultation.
On 24 February 2012 the Panel published its draft determination, which included a draft system restart standard. The draft system restart standard retains the key aspects of the interim standard with some clarifications and additions. These include some minor clarifications on the wording of the provisions for restoration timeframes and, for AEMO's consideration on the diversity of SRAS, the addition of fuel diversity as a specific factor to consider. The draft determination also discussed the Panel's considerations that periodic review of the standard would be beneficial to ensure that any changes in technology and/or market arrangements that impact the standard could be captured.
In the draft determination the Panel proposed that the final system restart standard apply from August 2013. This will provide certainty for AEMO and participants in the current round of SRAS procurement and execution of agreements that is expected to be completed by July 2012.
The Panel also planned to hold a public meeting in Sydney in April 2012. However, this public meeting was cancelled as no registrations to attend were received.
The Panel published its final determination on 12 April 2012. In making its decision, the Panel took into account issues raised in submission on the draft determination. The final system restart standard incorporated minor amendments to the draft standard. The minor amendments were for clarification purposes and did not have any material impacts. The final standard will apply from August 2013 (until that time, the interim standard will continue to apply).
As outlined in the draft and final determinations, the Panel also recommended that periodic review of the standard be undertaken. The Panel will request that the AEMC issue terms of reference for the Panel to conduct further reviews of the standard as appropriate.