Rule Change: Completed
Overview
The Commission has made a more preferable final rule in response to a rule change request from TransGrid. This final rule amends the National Electricity Rules (NER) to deliver an evolved framework for system strength. It is consistent with the draft rule and the ESB’s Post 2025 work.
This final rule will deliver system strength in the grid where it is needed. It is part of the suite of tools required to keep the power system stable and secure as it decarbonises. System strength is a critical service that supports inverter based resources (IBR), such as wind and solar generation, as well as batteries, which are rapidly becoming a key part of the national electricity market (NEM) generation mix.
The rule change request is related to the ESB’s Post 2025 market design advice, and dovetails in with that process.
Final rule determination
The final rule has three main elements, relating to the supply, coordination and demand for system strength:
- Supply side: System strength services will be supplied through a TNSP led procurement of system strength. TNSPs, working closely with AEMO, will be responsible for providing efficient levels of system strength on a forward looking basis over the given timeframe. The TNSP must provide system strength as a prescribed transmission service, with the TNSP required to meet a system strength planning standard at certain locations on its transmission network.
- Coordination: The system strength mitigation requirement provides connecting parties with IBR a choice between paying to use the system strength provided by the TNSP or providing their own system strength by remediating their impact. This mechanism means that while customers would bear some of the initial cost of providing system strength services, over time this cost will be recovered from connecting parties.
- Demand side: New access standards ensure that connecting parties with IBR would only use the efficient volumes of this valuable common pool resource. The new access standards also underpin the coordination measures, by allowing connecting parties to undertake actions to reduce the amount of system strength they require.
The supply side rules commence on 1 December 2022. The demand side and coordination reforms will commence on 15 March 2023.
These changes will mean that system strength – an essential system service – will be provided at sufficient levels through the transition, lowering costs to consumers.
Overview of rule change process
On 27 April 2020, TransGrid submitted a rule change request to amend the National Electricity Rules regarding the provision of system strength in the NEM.
The request proposed to abolish the ‘do no harm’ obligation and amend the minimum system strength requirements. This was intended to provide system strength in the NEM in a more proactive manner, to maintain a secure power system, and to provide additional levels of system strength to streamline the connection of new non-synchronous generators.
TransGrid’s rule change is one of seven rule change requests the AEMC commenced consultation on through the System services consultation paper. Submissions to the consultation paper were due on 13 August 2020 and can be found below.
The Commission released a draft rule determination, along with a draft rule, on 29 April 2021. Stakeholder submissions to the draft determination and rule were due on 17 June 2021 and can be found below.
On 24 September 2020 the Commission extended the period of time for making the draft determination to 24 December 2020 under section 107 of the NEL. On 10 December 2020 the Commission further extended the period of time for making the draft determination to 29 April 2021 under section 107 of the NEL. On 15 July 2021 the Commission extended the period of time for making the final rule determination to 21 October 2021 under section 107 of the NEL. These extensions were made to allow the Commission sufficient time to analyse and consult on stakeholder submissions made to the consult paper and draft rule determination, reflecting the complexity of the issues involved.
The Commission also released the reasoning behind a rule not being made within a year of the initiation of the rule change request on 17 June 2021. This s108A report is provided below.