The AEMC is now consulting on a rule change request for a spot market to facilitate the provision of inertia in the National Electricity Market (NEM).

The NEM is at the forefront of the energy transition globally. It has one of the highest penetrations of inverter-based resources (such as wind, solar, and batteries) worldwide, which are rapidly displacing synchronous generators, such as coal and gas.

A variety of influencing factors is driving us towards new and previously unobserved operational conditions, including declining system inertia.

Inertia is critical to maintaining the stability and reliability of the energy market. The greater the inertia of the power system, generally, the less vulnerable it is to disturbances. 

However, as the energy mix on the grid evolves, there is an increased risk of system security and efficiency challenges in the NEM.

To help examine these challenges, stakeholders are now invited to make submissions to a consultation paper looking into the efficient provision of inertia in the NEM.

This rule change request was submitted by the Australian Energy Council (AEC) and follows a joint AEMC and AEMO paper that was published in June 2022. 

Through this rule change process, the AEMC will seek to identify an option that ensures not only the secure and efficient operation of the power system as we navigate our way to net zero but one that leads to the least cost outcome to consumers in the long term.

Submissions by stakeholders in response to the consultation paper should be provided to the AEMC by 31 March 2023.

The policy and technical aspects of this rule change process will take time to work through. Prior to making a draft determination, the AEMC expects further public consultation will be required, which may take a form of a directions paper. The Commission has therefore extended the statutory timeframe for a draft determination until 29 February 2024.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au