The Australian Energy Market Commission (AEMC) has published a draft plan to incorporate new, ultra-fast frequency services into the national electricity market (NEM).

AEMC Chief Executive, Benn Barr, said,“The foundation of a low-carbon future for the energy sector is building new ways to keep the system in balance and stable through the transition. 

“System security is the most critical issue in the national electricity market and a key priority area for the Commission.  

“Our draft determination paves the way for valuing new types of fast-response services that can keep the system in a secure operating state – balancing electricity supply and demand in real time. 

“Achieving that balance through stable frequency means the system can ride through most power disturbances.”

Fast frequency services will come largely from batteries – but also from wind and solar PV, and potentially from energy users changing their demand for electricity in response to market needs (demand response). These new services will respond in two seconds or less – compared with the existing fastest services that operate over time frames of six seconds.

Frequency varies when electricity supply and demand don’t match – it must stay within a range of around 50Hz to avoid blackouts. This is because when frequency moves too far away from 50Hz, power system components like generators and network elements may not operate correctly and trip off the system as a self-protection mechanism.

While small imbalances in supply and demand are common and easily accommodated, larger imbalances are harder to control. They can include problems like faults causing large generators or large consumers to disconnect from the system, or storms damaging major transmission towers.

In the past, the power system had higher levels of inertia – produced by large continuously spinning machinery in coal, hydro and gas-fired power stations – which acted as a buffer against changes in frequency. As the generation mix changes, the level of inertia in the system is forecast to decline over the next decade – meaning more and faster services to control frequency are needed.

The draft determination is part of a suite of long-term security and reliability measures the AEMC is working on as it thinks ahead to the services that will be needed in a new-look power system and shifts the focus away from emergency solutions. 

It is the first of the new markets that will be put in place to value system services, and introduces arrangements to allow the Australian Energy Market Operator (AEMO) to procure fast frequency response services to better tailor the speed of response in the power system. 

“These ultra-fast services have never been provided before and this will introduce more flexibility into the fleet as well as spur on market innovation as solar, wind, demand-response and batteries compete to provide these sought-after services,” Mr Barr said.

“That’s good for consumers because it will keep costs down compared to an alternative of producing more of different types of frequency response which aren’t as granular. 

“This, plus the benefits of competition and innovation, will lower costs to consumers.” 

The fast frequency response work released today also aligns with the Energy Security Board’s wider program to develop essential system services – a key plank of its post-2025 market design.

The draft determination follows an initial rule change request from Infigen Energy and subsequent extensive consultation with stakeholders. 

Submissions to the draft are due by 3 June 2021. If approved, the changes will be in place within three years, which allows AEMO time to develop a product specification and make required IT and system changes.

The AEMC is also working on a separate rule change request from AEMO to improve incentives for primary frequency control during normal operation, with a draft determination expected by 16 September 2021.

To view the draft determination, click here.

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