Work to explore detailed options for operational procurement, including the potential benefits of an ancillary services spot market for inertia, will be informed by the Australian Energy Market Commission’s (AEMC) ‘Operational Security Mechanism’ (OSM) rule change.
In May, the AEMC announced a change in focus for its OSM rule change that will see emphasis placed on more immediate solutions to address the need for power system security as the market transitions to net zero.
In a forward direction note published last month, the AEMC considers that there may be more immediate and simple solutions available to address system security issues in the National Electricity Market (NEM).
As part of this shift in focus for the OSM rule change, the AEMC will investigate streamlining and simplifying the planning timeframe procurement of security services by Transmission Network Service Providers (TNSPs), including the existing framework for managing inertia in the system.
Through these frameworks, TNSPs respond to identified security needs by making network investments or contracting with providers of security services, helping keep the system secure.
Stakeholder feedback provided in response to the AEMC’s March 2023 consultation paper on inertia will also be addressed as part of the OSM rule change.
This feedback includes:
- suggestions to align inertia procurement with system strength so that transmission network service providers (TNSPs) can take benefits of both into account when considering investment decisions
- suggestions to reconsider how to determine system needs for inertia in the planning timeframe.
Insights and recommendations gathered through the OSM rule change process will help to shape the future direction of the inertia rule change when it is continued in 2024.
Visit the OSM project page to read more, including the forward direction note.
Visit the inertia project page to read more, including the consultation paper.
Media: Nicole Stokes, 0401 826 522, media@aemc.gov.au.