Many of the essential system services that support the grid, such as frequency response and inertia, have traditionally been provided as intrinsic by-products by thermal generation as part of producing energy and reserves. But as thermal plants retire, the supply of these critical services could dry up. Critical work needs to be done to value and procure essential system services like frequency, system strength, inertia and operating reserves that are key to supporting a changing generation mix. These services are necessary to keep the electricity grid in a safe, stable, and secure operating state. They influence the ability to balance supply and demand, deal with disruptions to this balance and address any other technical issues in real time. Much of this work is in train through rule changes with the Australian Energy Market Commission (AEMC) and will be delivered promptly to support a more secure and reliable system.
Backing up power system security is critical to keep energy reliable and affordable as more variable, non-dispatchable renewables join the grid.
Lack of essential power system services has cost consumers a lot of money in recent years as a result of expensive interventions needed to keep the grid system secure. New technical services, such as frequency, inertia, system strength, operating reserves, are needed as part of meeting the overall supply needs as the existing fleet continues to transition.
The national electricity market currently has over 17GW of wind and solar capacity installed. By 2025, this is expected to increase to at least 27GW of wind and solar capacity (including grid scale and domestic rooftop solar). Coal, gas, and hydro (synchronous) generation provide services like inertia, frequency control and system strength as by-products. They are not generated by wind or solar (asynchronous) energy in the same way, so must be provided and paid for separately.
Without the physical capabilities needed to keep the system stable and secure, the system becomes weaker and harder to control. AEMO is increasingly having to intervene in the market to keep the system secure which means the cheapest energy may not always be dispatched. Challenges such as balancing the system and maintaining stability where grid demand drops to almost non-existent levels, is now an urgent reality in parts of the NEM with the high penetration of solar PV resources.
The ESB’s objective is to ensure the system has resources and services when needed to manage the complexity of dispatch and to deliver a secure supply to customers.
The ESB is working closely with the Australian Energy Market Commission (AEMC) on rule changes that are developing these arrangements. Stakeholder feedback received by ESB is being used as an input in the AEMC’s comprehensive statutory consultation processes.
New markets to financially reward ultra-fast energy providers like batteries for reacting at short notice when the system needs frequency control to avoid blackouts.
Addressing options to control power system frequency to help keep the lights on while looking at how to reward investment and innovation in technologies that could respond to frequency variations within seconds.
Mandatory primary frequency response
On 26 March 2020, the AEMC made a final rule to require all scheduled and semi-scheduled generators in the NEM to support the secure operation of the power system by responding automatically to changes in power system frequency.
Monitoring and reporting on frequency control frameworks
On 25 July 2019 the Commission made a final rule which establishes ongoing reporting requirements on AEMO in relation to the frequency and frequency control performance; and on the Australian Energy Regulator (AER) in relation to the performance of frequency control ancillary services (FCAS) markets. The final rule was made in response to rule change requests from Australian Energy Market operator (AEMO) and the AER to action the recommendations made in the AEMC’s Frequency control frameworks review final report.
Operating reserve market
Introduction of ramping services
DIRECTIONS PAPER RESERVE SERVICES IN THE NATIONAL ELECTRICITY MARKET
Unit commitment for security and system security mechanism
Capacity commitment mechanism for system security and reliability services
AEMO’s Stage 1 Renewable Integration Study finds in the next five years the NEM power system will continue its significant transformation to world-leading levels of renewable generation, testing the boundaries of system security and current operational experience. This project combined six rule change requests relating to essential system services.
Synchronous services markets
Simpler, faster and more predictable grid connections for new generation
Efficient management of system strength on the power system
Transparency of new projects
On 24 October 2019, the Commission made a final rule to improve publicly available information about new grid-scale generation projects. The rule also allows a broader set of project developers direct access to important system information required to build grid-scale assets.
Testing of system restart ancillary services capability
On 20 March 2018, the AEMC made a final rule on notification requirements for new tests of system restart ancillary services (SRAS). Restart services are provided by generators with specialised equipment which allows them to restart after a system-wide blackout without needing electricity from the grid. The new rule exempts generators from notifying network services providers about a short notice test of SRAS capability. Instead, AEMO will work directly with network service providers to plan the test date.
System restart plan release provisions
On 20 February 2018 the AEMC made a rule that provides AEMO with greater regulatory certainty in disclosing the system restart plan to certain parties for the purposes of preparing for, and participating in, system restoration during a major supply disruption.
Generator technical performance standards
On 27 September 2018, the AEMC made a rule that makes significant changes to technical performance standards for generators seeking to connect to the national electricity grid, and the process for negotiating those standards.
Classification of loads as ancillary service loads
On 8 August 2017 the AEMC made a rule that maximises the number of customers who are able to provide market ancillary services, such as frequency control ancillary services (FCAS), by removing the restriction of only “market load” being able to be classified as ancillary service load.
Generating system model guidelines
On 19 September 2017 the AEMC made a rule that clarifies the scope and level of detail of model data that registered participants and connection applicants are required to submit to AEMO and network service providers.
Managing the rate of change of power system frequency
On 19 September 2017, the AEMC published a rule to place an obligation on Transmission Network Service Providers (TNSPs) to procure minimum required levels of inertia or alternative frequency control services to meet these minimum levels.
Managing power system fault levels
On 19 September 2017, the AEMC published a final rule to place an obligation on Transmission Network Service Providers (TNSPs) to maintain minimum levels of system strength.
Emergency frequency control schemes
On 30 March 2017, the AEMC published a rule to establish an enhanced framework for emergency frequency control in the NEM, including the introduction of the power system frequency risk review, the protected events framework, and an enhanced process to develop emergency frequency control schemes.
Further background material from ESB post 2025 technical working groups can be accessed here:
- Presentation to Technical Working Group - ESS - 200501
- Presentation to Technical Working Group - ESS - 200716
- Presentation to Technical Working Group - Scheduling and Ahead Markets - 20014
- Presentation to Technical Working Group - Scheduling and Ahead Markets - 200026
- Presentation to Technical Working Group - Scheduling and Ahead Markets - 200819
- Presentation to Technical Working Group - Scheduling and Ahead Markets - 200825
- Presentation to Technical Working Group - Scheduling and Ahead Markets - 200407