PIAC responded to the AEMC’s Reliability Panel review of the Frequency Operating Standard (FOS). PIAC notes that there has been a trend in market reviews, and other reliability and security related processes, for ratcheting up system security and reliability settings. While reductions in system security and quality of supply can have cost implications, it is essential that the Panel bears in mind that measures to increase system security and the quality of supply have costs as well. Without fully understanding the cost-benefit trade-offs consumers are willing to accept, there is a risk that the planning and operation of the power system may effectively be ‘gold plated’.
PIAC supports the Panel’s proposed 2-staged approach to the review, and supports a greater role for Demand Response (DR) in addressing issues of system security, noting that ncreasing the pool of potential DR service providers will help ensure more efficient prices.
Reducing unfair fines and over-policing from alcohol-free zones