The latest report from the AEMC’s Reliability Panel shows that over the past year the market had the tools it needed to keep energy supply secure and reliable. But it signalled the importance of planning now for the transition underway – such as extreme weather events and a changing generation mix.

The final 2020 Annual Market Performance Review report examines the reliability, security and safety of the national electricity market (NEM) from July 2019 to June 2020.

It looks at performance as Australia’s power system is transitioning through a rapidly changing environment. Changes to the power generation mix and market dynamics, severe weather events, and other global disruptions are happening at an increasing pace that is likely to continue over the next two decades.

Key findings from 2019-20:

  • The  reliability performance of the market was satisfactory and the existing regulatory framework provided the tools needed to manage reliable supply. However, high peak demand and extreme environmental events such as bushfires and storms posed operational challenges. Future work should incorporate what was learned during the year in order to develop effective arrangements to preserve the reliability and security of energy.
  • Changes to Australia’s mix of power generation sources are changing market dynamics by creating more variability in the system. The Panel noted that this variability is presenting challenges for forecasting and operation of the power system, such as times of tight supply demand balance in shoulder periods. The effects include low wholesale prices during hours of peak supply from variable renewable sources, such as solar. As prices fall, traditional thermal generators may operate less often.
  • The rapid uptake of distributed energy resources, such as rooftop solar, is creating challenges in managing key elements of system security, including minimum system load, system strength, inertia and voltage control. The Panel noted this trend also complicates the operator’s task of forecasting supply and demand in the power system. These issues are not new but their impact on the system operator and networks is increasing at a rate that is faster than expected.

The Panel recognises that there are reforms currently underway that aim to address the above findings of present and future reliability and system security issues, including the AEMC system security work program, as well as the ESB post-2025 market review.

The Panel will continue to assess and monitor system security as part of its future work, including 2021 Reliability Standard and Settings review, and will continue to work closely with the relevant bodies to influence the direction of this work.

The final report of the Annual Market Performance Review is designed to:

  • Provide stakeholders with consolidated information and expert commentary about the reliability, security and safety performance of the power system and market in a single publication
  • Highlight emerging trends to help inform the policy and investment decisions of governments, policymakers, market institutions and market participants
  • Identify areas for attention related to the frameworks or mechanisms used to deliver reliability, security and safety.

The report also aims to help stakeholders provide informed input into current issues and reforms that are underway related to reliability and security of the NEM so that discussion can lead to effective solutions to emerging power system issues.

The Panel is chaired by AEMC Commissioner, Charles Popple. Its members are broadly representative of all stakeholders interested in the operation of the power system and the electricity market including consumer groups, generator, network service providers, retailers and the power system and market operator

The value of the report comes from this diverse membership’s capacity to bring together all the relevant information into an accessible format and provide a collated view of what is happening in the power system.

Media: Kellie Bisset 0438 490 041