Christiaan Zuur

Director

 

The Australian Energy Market Commission is currently progressing a review into power system strength. It’s all about that quality of the power system that helps keep generators connected and works to prevent large scale blackouts from happening. Historically, system strength was supplied as a free by-product of synchronous generators which are typically coal and gas fired generators, as well as hydro generators. As the power system transitions to an increasingly non-synchronous generation mix - which are typically wind and solar generators - we need new ways to provide system strength. The AEMC is developing frameworks to facilitate this transition to a lower emissions future, while keeping costs down as far as possible for customers.

What is system strength?

System strength is a difficult concept to define. It is an umbrella term that refers to a number of different issues. To make sense of it we need to take a bit of a trip back to high school physics. Don’t worry – there are no equations ahead!

Electricity coming out of your powerpoint has two key “components”: current and voltage. To use an hydraulics analogy, current is like the amount of water running down a pipe, while voltage is the pressure of the water in the pipe. It’s important that this pressure doesn’t get too high, or too low, or change too quickly; a strong, stable voltage means we can push power around the system in a steady, controlled manner.

Our power system is an alternating current (AC) system. This means both current and voltage constantly “move” back and forth, in a manner that can be represented as a regular sine wave. A strong, stable voltage means this voltage sine wave is very smooth in shape, doesn’t deform too much when there is a disturbance on the system, and typically doesn’t get too big or too small. We say the system is strong if the voltage wave form meets these conditions; it exhibits high system strength.

What’s changed?

It turns out that system strength is increasingly important to support the transition to a lower emissions generation fleet. However, this is happening at the same time as we have fewer sources of system strength, as old, “synchronous” generators retire or operate less often.

Synchronous generators like coal, gas and hydroelectric generators stabilise the voltage wave form as a “byproduct” of their power production. This is due to the fact they are physically coupled to the grid. At the moment, most wind and solar generators don’t do this, as they use electronics - computers and inverters - to couple with the grid.

Furthermore, these inverter connected generators also need a smooth and stable voltage wave form to operate properly. In fact, when they connect, some of these generators can “use up” some of the available system strength. But this may change in the future as new technologies, particularly “grid forming” inverters, become more widespread.

The national electricity market power system is at the global forefront of managing system strength issues. This is because Australia’s power system is long and stringy, as well as having some of the highest penetrations of wind and solar generation on earth.

While this rapid uptake of new generating technologies is a critical element to lowering emissions, it brings with it several system strength challenges which must be addressed head on.

What does it mean for the power system?

The combination of less system strength being provided, coupled with the connection of more generators that need it to run smoothly, can create some challenges.

In the short term, it can make it harder to operate the system. A lack of system strength means the power system can become unstable following a disturbance, like a lightning strike. In order to prevent this from happening, the Australian Energy Market Operator (AEMO) as operator of the market sometimes turns off the wind and solar generators pre-emptively, to reduce demand for system strength. Alternatively, or in conjunction with this, AEMO sometimes intervenes in the market to direct the coal, gas and hydro generators to keep running, to increase supply of system strength.

Over the longer term, a lack of system strength will make it harder for new generators connected to the grid to generate. This is a major problem, as our existing synchronous generation fleet is getting older, with many of the coal and gas generators expected to retire over the next two decades. We need to replace these retiring generators, and AEMO expects most of the new generators that replace them will be non-synchronous wind and solar … precisely the type of generators that do not currently provide much system strength.

So, what are you doing about it?

The AEMC identified system strength as a priority problem back in early 2016 and initiated the system security market frameworks review (July 2016) to address the structural changes which were changing the face of power generation at great speed. We moved fast to introduce measures to shore up the system. Significant work was launched to integrate increasing amounts of renewables at the same time as coal-fired generators started leaving the market. While this work has helped keep the system secure, it is ongoing. Market transformation will not happen overnight. We need to evolve the frameworks, to continue to facilitate the transition to a high renewables fleet, which is already underway.

The AEMC is working with the Energy Security Board (ESB), and the other market bodies, to evolve the framework for system strength. In doing so, we are considering all the ways that the system can be made stronger.

We are starting by asking two key questions:

1. How can we make sure we have an adequate supply of system strength? As we discussed above, some generators (and other machines) can “supply” system strength. The AEMC is thinking about how to use existing machines, or build new ones, to supply system strength at the lowest possible cost to consumers.
2. How do we make sure we use as little system strength as possible? As some generators “use up” system strength in order to generate electricity, we need to make sure they use as little as possible. The AEMC is thinking about what kinds of obligations generators should bear, so they have the right incentives to use less system strength. We are also thinking about how to make sure that generators locate in the best parts of the grid, to keep costs down for consumers.

We are also thinking about what an evolved system strength framework might look like. To do this, we are asking four key questions:

• How do we plan for system strength? Many of the assets that supply or transport system strength take a long time to build. We need to make sure there is enough time, and effective coordination, so these assets are built at the right time and in the right place
• How to we procure system strength? There are many parties that can buy system strength, including networks, AEMO and generators themselves. We need to figure out who is best placed to do this, to deliver what is needed at lowest cost
• How do we price system strength? As system strength does a number of different things, we need to think about how best to price it.
• Who pays for system strength? As there are many beneficiaries of system strength, we need to think about who is best equipped to bear these costs

We published a discussion paper in March 2020 that explores these questions in more detail, and are now working with the ESB, AEMO, Australian Energy Regulator (AER), consumers, the jurisdictions and industry to figure out the answers. In particular, we are working closely with the ESB, because some of the things we are thinking about are related to the ESB’s post 2025 market reform work on essential system services. Some of the key questions we are thinking about right now include:

• How much system strength should AEMO, networks and generators provide? System strength can be sourced by multiple agents, using different technologies, and with various parties paying for the service. We are thinking very carefully about how much system strength should be provided, and who should be buying it, as this has implications for consumer bills.
• What kinds of technologies exist today, and what might be possible tomorrow? Right now, there is a relatively small set of technologies that can provide system strength. However, emerging technologies, particularly “grid forming” inverters and batteries, have the potential to provide system strength at lower cost in future. We are looking to design regulatory frameworks that are sufficiently flexible so that these technologies can be harnessed in future, as they become more mature.
• How do we define system strength? System strength is an umbrella term that includes many issues and concepts. Right now, we are looking at ways to try and define it more effectively. For example, do we continue to measure it by reference to “fault current”, which is the traditional unit of measure? Or should we be looking to measure it by reference to the “stiffness”, or “cleanness” of the voltage wave form? This is a technically complex question, and we are working closely with industry and AEMO to figure out the answer

System strength is an exciting and world leading issue. Here in the NEM we have a unique opportunity to innovate and explore new solutions to address this complex problem. The answer to the problem will have significant implications for how quickly, how smoothly and at what cost the Australian power system makes the transition to the lower emissions grid of the future.