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, b.hall@cornwall-insight.com,  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.

If you like this Energy Spectrum Australia sample, find out more about the publication here.

Related thinking

Announcement

Australian FCAS power price trends

This report provides power price trends for the technology enablement as a percentage of total market share, using outputs from Cornwall Insight Australia’s latest Frequency Control Ancillary Service price curve (FCAS), published on 30 August 2022. We hope this information is of value-add to you and your business. Please don't...

Commercial and market outlook

Energy Market Alerts provide latest updates in a complex market

Cornwall Insight Australia summarises all the essential facts in our Energy Market Alerts, designed to keep you up to date with all the latest developments in the market. The energy market is changing so fast that our Alerts will ensure you have the facts to hand when you need them....

Low carbon generation

What’s in store? Our analysis of the co-location development pipeline

Amid underlying volatility in wholesale power prices, opportunities for access to wider flexibility revenue streams, and the impact of price cannibalisation, the case for co-location for renewable energy assets is growing. As part of Cornwall Insight’s Renewables Pipeline Tracker service, a case study is included in each report’s release based...

Commercial and market outlook

Capacity, reform, and unlawful strategies: 5 things that happened yesterday

Capacity, reform, and unlawful strategies: yesterday was a busy day for energy geekery. The developments encapsulate the shorter and longer term challenges and uncertainties present in the energy market presently: Read the full article here

Commercial and market outlook

Two thirds of energy industry professionals think the market needs to be drastically reformed

A survey conducted of over one hundred leading energy market professionals from across the investment and advisory community, by Cornwall Insight, from the attendees of its Financing Net Zero forum, has shown nearly two thirds (63%) of people working in the energy industry1 believe the UK market needs to be...

Low carbon generation

A collection of resources on net zero – Net Zero Week 2022

For Net Zero Week 2022, we released a range of resources to help you on your journey to net zero. For convenience, we have put them all together in a handy Resource Report. To read the full collection of resources, please log in to your account or sign up for...

Low carbon generation

CfD Auction Secures Greatest Amount Of Renewable Capacity To Date

Yesterday, the government released the results of the fourth round of the Contracts for Difference (CfD) scheme, securing almost 11GW of renewable capacity across 93 projects, nearly double the 5.8GW awarded in Allocation Round 3 in 2019. The greatest capacity – at 7.0GW - has been secured from new offshore wind projects,...

Home supply and services

Windfall taxes are not the only solution to the energy crisis

The energy market is in a state of transition, with geopolitical concerns threatening to undermine energy security and subsequent wholesale energy rises pushing up bills. It is inevitable that policymakers will look at how best to deliver an affordable energy system for consumers. The temporary, targeted energy profits levy, or...