The Australian Energy Market Commission (AEMC) has published a directions paper outlining the proposed system improvements, after announcing a change in direction on its ‘operational security mechanism’ (OSM) rule change in late May.
As traditional thermal power sources such as coal-fired power stations approach end of life, a greater proportion of variable renewable energy (VRE) sources and storage assets such as solar PV, wind and batteries are being introduced to the system.
The Australian Energy Market Operator (AEMO) has needed to regularly intervene, to direct generators to provide additional system security to complement VRE sources, to help ensure a more secure supply of power for energy users.
After carefully considering feedback to its proposal for an OSM as a new tool to allow AEMO to value, procure and schedule security services within the market’s operational timeframe, the AEMC is now investigating more immediate, simple and flexible solutions.
Proposed changes from the AEMC include:
- aligning existing frameworks for inertia and system strength
- allowing inertia network services and system strength to be procured under the Network Support and Control Ancillary Services (NSCAS) framework to cover any short-term security gaps
- creating a new transitional Non-Market Ancillary Services (NMAS) for AEMO to procure security services necessary for the energy transition that cannot be procured in any existing framework.
- empowering AEMO to enable (or ‘schedule’) security services with a whole-of-NEM perspective
- providing greater transparency and amending the basis for compensation in relation to directions.
The AEMC is now accepting feedback in response to these potential improvements, which also come under a new name: ‘Improving Security Frameworks for the Energy Transition’.
Written stakeholder submissions are being accepted until 5pm (AEST) 28 September 2023.
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