A new review by the Australian Energy Market Commission (AEMC) will assess the need for possible changes to market arrangements in order to maintain energy security.
The System Security Market Frameworks Review will look at whether wholesale energy market frameworks are suitable to complement increasing volumes of renewable energy and to maintain power system security as the industry transforms.
It will also address the need for possible changes to market arrangements that lead to more efficient outcomes for energy consumers while delivering a secure operating system.
The impact of renewable energy on system security was highlighted in the AEMC’s Strategic Priorities for Market Development as an important focus in the coming years and this review will continue its work in this area.
Challenges in maintaining power system security are emerging because of the physics of maintaining technical generation parameters like voltage and grid frequency.
Conventional electricity generation, like hydro, coal and gas, operate with large spinning turbines that are synchronised to the frequency of the grid.
These generators support the stability of the power system by working together to maintain a consistent operating frequency.
Less conventional forms of electricity generators, such as wind and rooftop solar, are not synchronised to the grid and are therefore limited in their ability to dampen rapid changes in frequency or respond to sudden large changes in electricity supply or consumption.
The review will provide recommendations to the Council of Australian Government’s Energy Council with an interim report to the nation’s energy ministers due by the end of 2016.
The recommendations will address changes required to the regulatory framework to meet power system security challenges in the National Electricity Market caused by increasing levels of non-synchronous generation.