A new analysis of Australia’s energy market finds that while we have a reliable amount of power supply, it is becoming harder to keep that power supply stable.

The AEMC’s Reliability Panel today published its annual review of the security, reliability and safety of the national electricity market for the period July 2016 to June 2017. 

This latest report shows that managing the power system – keeping things like frequency and voltage within technical limits - is becoming more challenging.

The report considers several incidents in 2016/17 which showed the extent of the potential supply and price impacts for consumers following major security events in the power system. This includes the South Australian black system event on 28 September 2016, which resulted in a total loss of supply to the region and its 850,000 customers. 

The report notes the package of new tools introduced by the AEMC in 2017 to help AEMO address the immediate issues concerned with the stability of the power system resulting from the changing generation mix.

These included requirements for networks to provide minimum levels of inertia and system strength, and new ‘last line of defence’ schemes to help AEMO better prepare for, and respond to, a system security emergency.

The report also acknowledges the significant body of work underway on maintaining the resilience of the national electricity market. This includes the AEMC's Frequency control frameworks review and work on the Generator technical performance standards rule change request.

In terms of reliability, the Panel found there was enough capacity in generation and demand response in the market to meet the reliability standard set out in the rules all the time across all regions. The Panel also noted a number of projects underway to address reliability over the longer term, including the:

  • Energy Security Board’s proposed national energy guarantee which integrates energy and climate change policy through a retailer obligation to purchase energy which meets emissions reduction targets for the electricity sector along with dispatchability requirements in each region
  • AEMC’s reliability frameworks review into the lowest cost ways of delivering reliable electricity supply into the long-term (directions paper due March 2018)
  • Reliability Panel’s reliability standard and settings review (final report due April 2018) on the parameters which help guide efficient investment in generation and demand response, as well as operational decisions
  • AEMO/ARENA’s demand response trial – a three year initiative to pilot demand response projects, and encourage other market responses to provide firm capacity.

Prudence Anderson 0404 821 935 or (02) 8296 7817
Bronwyn Rosser 0423 280 341 or (02) 8296 7847
20 March 2018

About the Reliability Panel 

The Reliability Panel's core functions relate to the security, reliability and safety of the national electricity system. The Panel is chaired by AEMC Commissioner, Dr Brian Spalding. Its members represent a range of participants in the national electricity market including consumer groups, generators, network businesses, retailers and AEMO. 

About system security

The power system is secure when it is able to operate within defined technical limits, even if there is an incident such as the loss of a major transmission line or large generator. The key technical parameters that need to be managed are power flows, voltage, frequency, the rate at which these quantities change and the ability of the system to withstand faults.

About reliability

Reliability of the power system is about having enough generation, demand response and network capacity to supply customers. The Annual market performance review is focussed on reliability at the wholesale market level. In this context, the wholesale market refers to the supply of energy from generation or demand side response, and transported by inter-regional transmission infrastructure interconnectors.