Energy generators from across the fossil fuel and renewables divide have banded together to push for regulatory reform to deliver more clarity on who is responsible for system security, paving the way for more market-based solutions.
The move comes in the wake of the Australian Energy Market Operator’s latest Transition Plan for System Security which flagged unresolved system strength and security issues in Queensland, New South Wales and Victoria over coming years. And after the energy rule maker decided against a new market for inertia.
Minimum system load conditions, along with at times insufficient synchronous generators being online saw AEMO forced to intervene in the market to maintain system strength in NSW, Victoria and South Australia on “multiple days” in November and December.
South Australia’s state-wide blackout in 2016 demonstrated how failures to maintain sufficient system strength can lead to severe consequences.
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Justice and Equity Centre senior energy adviser Craig Memery welcomed a move towards more market solutions which he said provided protection for consumers as well as the market by enabling the procurement of 1-5 year solutions, rather than locking in the cost of synchronous condensers which have a 20-year asset life.
“It would be great if the AEMC had taken a broader view for the rule change proposal that was already put in front of them to introduce a market based measure for inertia.
“Then we might not be having to introduce this workaround that involves wrangling these market-based solutions into the transmission based approach,” Memery said.
He cautioned that any regulatory change would need to ensure it didn’t lock in payments for solutions long past when they would be needed to support the grid.
