The Australian Energy Market Commission (AEMC) has today released a Directions Paper examining potential approaches for procuring inertia – a crucial service that helps maintain power system stability as Australia transitions to more renewable energy.
AEMC Chair Anna Collyer said the paper examines whether there could be value in complementary ways to secure inertia services.
"Our analysis examines potential benefits of procuring inertia in operational timeframes, which could complement our existing framework," Ms Collyer said.
- The paper progresses the AEMC’s assessment of the proposed introduction of operational procurement of inertia
- The AEMC proposes that while minimum levels of inertia are best met by long term procurement, there is merit in exploring further whether operational procurement of additional levels could potentially help reduce system costs and support efficient dispatch.
The analysis indicates there may be economic benefits in procuring additional inertia in real-time.
However, the Commission emphasises that further investigation of technical feasibility, implementation considerations and costs is needed before determining the most appropriate approach.
The Directions Paper identifies several key areas requiring further examination, including:
- The interaction between any new procurement mechanism and existing frameworks
- Technical requirements and capabilities
- Implementation and operational considerations
- Costs and timing of potential reforms.
"While our initial economic assessment shows potential benefits, we need to carefully examine the technical and practical considerations to determine the path that provides the best outcomes for consumers," Ms Collyer said.
The AEMC is seeking stakeholder feedback on the analysis and considerations outlined in the Directions Paper by 5 February 2025. This input will inform the draft determination, expected in June 2025.
For more information and to access the directions paper, please visit the Efficient provision of inertia project webpage.
Media: Jessica Rich, 0459 918 964, media@aemc.gov.au