Rule Change: Open
On 2 March 2023, the Australian Energy Market Commission (AEMC) initiated a rule change request from the Australian Energy Council (AEC) proposing an ancillary service spot market for inertia in the national electricity market (NEM) to ensure a secure and efficient operation of the power system through the energy transition.
The AEMC’s consideration of this rule change request will progress the Energy Security Board’s (ESB) post-2025 market design project workstream on essential system services (ESS) to keep the electricity grid in a secure and efficient operating state through the energy transition.
On 2 March 2023, the AEMC published a consultation paper to seek stakeholder feedback on:
- key challenges arising from declining system inertia and the adequacy of the existing inertia framework in ensuring the secure and efficient operation of the power system in the long-term;
- further work required to better understand the power system needs and inform the development of a long-term inertia arrangement; and
- AEC’s inertia spot market proposal and other alternatives.
Written submissions responding to this consultation paper are due Friday, 31 March 2023.
The NEM could undergo a significant and complex change should an inertia spot market or other inertia reforms be introduced. Considering that, extensive stakeholder consultation and further work is required to address the issue of decreasing inertia in the power system. The AEMC also needs adequate time to better understand the power system needs and how new technologies can substitute for synchronous inertia.
Given the complexity of the matter, the Commission extended the timeframe for a draft determination to 29 February 2024. This will provide ample time for comprehensive analysis, which will include examining how the rule change request interplays with other critical system service reforms currently in progress.