Market Review: Completed
The Australian Energy Market Commission (AEMC) has published its final report of the System security market frameworks review. The report makes nine recommendations for changes to market and regulatory frameworks to support the shift towards new forms of generation while maintaining power system security.
The priorities of the review have been to develop recommendations that will result in:
- a stronger system
- a system better equipped to resist frequency changes
- better frequency control
- action to further facilitate the transformation.
Implementation of recommendations
Three of the report’s recommendations to be put in place through existing rule change request under consideration without the need for further implementation processes.
- Managing the rate of change of power system frequency: This rule change requests that a mechanism be introduced in the National Electricity Rules (NER) to provide for services needed to manage rates of change of powert system frequency.
- Managing power system fault levels: This rule change request seeks to allocate responsibility for managing power system fault levels, also known as system strength, in the NEM.
- Inertia ancillary service market: This rule change request seeks the introduction of a market for the provision of inertia services. The Commission has extended the time for making a draft rule and draft determination on this rule change to 7 November 2017 under section 107 of the NEL.
Other recommendations made in the report are likely to be the subject of a rule change request expected from AEMO in July 2017, while the Commission will progress a further tranche though a targeted review it will self-initiate, also in July 2017.
The AEMC self-initiated the System security market frameworks review in July 2016 under section 45 of the National Electricity Law and published a terms of reference. The AEMC self-initiated the review to address two key emerging issues: the management of frequency and of system strength in a power system with reduced levels of synchronous generation. The review was coordinated with ongoing technical work on these and related issues undertaken by the Australian Energy Market Operator.
In December 2016, the AEMC published an interim report on the System Security Market Frameworks Review. The report sets out some of the key aspects of system security being considered and some of the preliminary findings of the Commission.
In March 2017, the AEMC published a directions paper which presented its proposed approach to resolving these issues. The directions paper assessed frequency management options and developed two staged packages for further stakeholder feedback.