The Australian Energy Market Commission (AEMC) has today made a final rule to address system security issues efficiently and proactively through the energy transition.
The rule, shaped by extensive stakeholder feedback, builds upon existing tools in the power system to enhance system security procurement frameworks. It responds to two rule change requests from Hydro Tasmania and Delta Electricity.
As the energy market transitions, ensuring system security becomes increasingly complex.
While every day brings new information about how best to operate a future system with more inverter-based resources, the capabilities of emerging technologies are still being tested and understood and synchronous plant continues to retire. As a result, there may be periods of scarcity in essential system services.
AEMC Chair, Anna Collyer, emphasised the importance of this rule in navigating the transformation.
"As we move towards a net-zero power system, ensuring system security becomes increasingly complex. This final rule is a crucial step along the way to managing the security of the future system.
"It builds on the systems and information that we know today to deliver a secure system more efficiently and proactively, while also building our understanding to prepare us for the system needs of tomorrow.
"In this context, the reforms will address system security issues through the transition, reduce the regular and inefficient use of directions, and provide better incentives for participants to invest in providing system security.'' she said.
The rule proactively facilitates a secure power system transition by enhancing procurement frameworks to reduce reliance on directions and drive investments in new technologies.
It will also improve cost recovery arrangements for Transmission Network Service Providers' (TNSP) non-network security contracts to promote efficiency and minimise price volatility for customers.
Further, the rule will increase transparency on current system security needs and understanding, and how the Australian Energy Market Operator (AEMO) plans to manage system security during the transition to a net-zero emissions power system.
The Commission has also introduced a new non-market ancillary service (NMAS) framework for transitional services, allowing AEMO to procure two new types of services to assist the transition to a secure net-zero power system.
Under the rule, a new annual reporting requirement known as the ‘transition plan for system security’ will be implemented, It requires AEMO to report on the steps it will take to manage system security through the transition.
Additionally, the final rule aims to improve real-time market notices and post-event directions reporting, providing more transparency to stakeholders.
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Media: Jessica Rich 0459 918 964 or media@aemc.gov.au
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