AEMO: new markets & standards to help integrate renewables

The below sample has been taken from our second edition of Energy Spectrum Australia, and if you have enjoyed reading this article and want to read more about the latest developments in the Australian energy market, please contact Ben Hall,,  for more information.

On 1 October AEMO published an analysis and international comparison of Australia’s power security and level of renewables penetration.
AEMO recognises that parts of the country are experiencing some of the highest levels of wind and solar generation in the world. Rooftop solar penetration (20%) is comparable to Hawaii and in order to integrate it successfully will require more active management through increased visibility.

Operating a safe grid is not impossible with high variable renewable energy (VRE) penetration (see Figure 1). AEMO finds that synchronously interconnected power systems have operated for periods where wind and solar energy was larger than demand – including Denmark (157%) and South Australia (142%).

Lessons to be taken from integrating renewables in other jurisdictions include:

  • Ramping constraints to account for uncertainty in both demand and renewable generation. Imposing maximum ramp rates for renewables, which ramp quickly, reduces stress on the system as well as suppress volatility; Denmark and Hawaii have both instituted ramp rate caps. AEMO is undertaking further studies to assess how ramping will affect the NEM at higher levels or VRE.
  • Undertake more active frequency and voltage management, including primary frequency response, minimum inertia requirements, dynamic reactive power support. Post fault active power (voltage) recovery was identified as a system need as synchronous generation leaves the grid but no specific solution has been implemented in other jurisdictions.
  • Utilise a precautionary approach to allow for operation limits to be relaxed in a controlled fashion to mitigate system risk as a new operational baseline is established. Ireland is utilising this method on the transition to 75%wind by 2021.
  • Mandate inverter ride through requirements along with standard connection standards for DERs.

To solve some of these issues AEMO is looking at potential minimum inertia requirements, further active power standards post faults, ramping markets or standards and active DER management.

AEMO’s acknowledgement that the changing dynamic of integrating increased renewables into the NEM will require a fundamental shift in understanding and operation of the NEM by themselves is encouraging. The report provides a positive roadmap for the development of standards and markets that value the new services that must be procured in order to continually operate the grid in a safe fashion.

This acknowledgement and AEMO’s intention to quantify the technical operational limits of the NEM under a changing future technology mix with decreasing synchronous generation is a move in the right direction. This will ensure the AEMO can operate securely without adversely impacting the market as has been the case with the curtailments in North West Victoria (NWV). The development of multiple markets that provide resources and tools that are fit for purpose (ramping, frequency, voltage, reserves etc.) will be paramount to an effect NEM where participants are rewarded for the services they provide.

A willingness to identify and pursue system operation limits will directly impact NWV. Other areas of the grid where high penetrations of
(particularly solar) is forecast (South West NSW and Northern Queensland) will also be impacted. It is a clear message to the market that AEMO will likely develop and implement technical limits alongside potentially multiple new markets.

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