Announcement date
15 July 2021
Problem being addressed
Under the current market arrangements, the Australian Energy Market Operator (AEMO) procures services to stabilise the electricity network in response to a range of scenarios. One of those is a services is targeted at arresting sudden changes in power system frequency.
Fast frequency response services are expected to play a growing role in managing contingency events (an event that affects the power system which would likely involve the failure or sudden and unexpected removal from operational service of a generating unit or transmission element), particularly during periods when there is a lower level of inertia in the power system. Inertia is an inherent characteristic of large spinning synchronous machines such as coal-fired steam turbines. The level of synchronous inertia in the power system is projected to decline over coming years as the power system transforms away from these types of generators.
Without intervention, the cost of frequency control ancillary services could increase significantly.
Proposal
To amend the National Electricity Rules to to introduce two new market ancillary services in the National Electricity Market under the existing frequency control ancillary services arrangements, accompanied by additional reporting requirements. The introduction of these services is intended to help keep the future power system secure and foster innovation in faster responding technologies that will help lower costs for consumers. The new market ancillary services will allow for fast frequency response to be procured by the AEMO in the form of very fast services to help control power system frequency following sudden and unplanned generation or power system outages, known as contingency events. The use of these new services is expected to lower the cost of frequency control ancillary services relative to the expected future costs under a continuation of the current market ancillary service arrangements or other alternative arrangements.
RIS outcome
Compliant with RIS requirements for National Standard Setting Bodies