The  Commission made a more preferable final rule on 7 March 2024 clarifying the mandatory primary frequency response (PFR) obligations of scheduled bidirectional units (i.e. batteries with a capacity of 5MW or greater) in response to a rule change request received from the Australian Energy Market Operator (AEMO). Under the final rule, batteries will have to provide PFR when they are exporting or importing energy, including when enabled to provide a regulation service. They will not have to provide PFR when solely providing contingency services or at rest.

The obligations in the final rule are consistent with those outlined in the draft rule.

The final rule seeks to promote the long-term consistent and predictable provision of PFR by balancing security needs and any incremental costs incurred by battery operators. Importantly, the widespread adoption of PFR will continue to play a key role in maintaining system security as the generation mix continues to decarbonise.

The consideration of this rule change builds on previous work completed by the Commission and the Reliability Panel to establish enduring arrangements for the long-term provision of PFR. In particular, the Commission notes that this proposal follows on the Primary frequency response incentive arrangements rule 2022 (PFR Incentives Rule) that confirmed the mandatory PFR obligations for scheduled and semi-scheduled generators introduced frequency performance payments and related reporting obligations.

The final rule seeks to clarify the mandatory PFR obligations of scheduled bidirectional plant

On 7 March 2024, the AEMC made a more preferable final rule to clarify the operating states during which scheduled bidirectional units are required to provide PFR.

Under the final rule, scheduled bidirectional units will be required to comply with the primary frequency response requirements (PFRR) when:
 

• they receive a dispatch instruction to generate a volume greater than zero MW – commencing 3 June 2024
• they receive a dispatch instruction to charge (consume electricity) at a volume greater than zero MW (except when solely powering auxiliary loads) – commencing 8 June 2025
• they receive a dispatch instruction to provide a regulation service – commencing 8 June 2025.

Importantly, under the final rule batteries will not be required to provide PFR when at rest and when enabled solely for contingency FCAS.

The Commission notes that a battery may be technically capable of providing PFR at all times, and may choose to do so given the benefits, including increased contingency FCAS registration, simplification of control systems, and receipt of frequency performance payments. The final rule is not intended to preclude or restrict the provision of PFR in this case.

Importantly, the changes will not apply to pumped hydro storage given that they will not be classified as bidirectional units under the integrating energy storage systems (IESS) rule since they are incapable of linearly moving from one mode of operation to another (charging to discharging or vice versa). Under the final IESS rule  , these units will be classified as a scheduled generating unit and a scheduled load.

The final rule includes several minor changes building on existing PFR frameworks

The final rule also includes several minor changes (consistent with the draft rule) that will improve the effectiveness of the existing frequency control frameworks and promote long-term, predictable and consistent PFR provision, including:

• clarifying that scheduled bidirectional units will not need to renegotiate their connection agreement when revising PFR settings in accordance with the PFRR
• enabling AEMO to request that affected plant transmit the status of their frequency controller through existing communications equipment to improve AEMO's operational awareness of the frequency responsiveness of the system
• clarifying that semi-scheduled generators and scheduled bidirectional units must not change frequency control settings without the prior approval of AEMO.

Stakeholder views informed the Commission’s final determination

We obtained and considered wide-ranging stakeholder views via submissions to a consultation paper, submissions to the draft determination, by direct engagement in bilateral and multilateral discussions and with our technical working group.