AEMC dumps “do no harm” rule to end chaotic response to system strength issues

The Australian Energy Market Commission has announced major changes to the way “system strength” is managed on Australia’s main grid, effectively ending its controversial “do no harm” legislation from 2017 and putting the responsibility on network owners to manage the issue.

System strength is an essential grid service that is key to maintaining voltage control in the face of a disturbance, and concerns about the state of system strength has caused significant delays to the commissioning of many big wind and solar farms, and caused many to have their output reduced to manage the risk.

In 2017, in what was widely seen as a panicked response to the South Australia blackout and the Finkel Review, the AEMC introduced new rules – known as the “do no harm” rule – that put the emphasis on new generators to “make good” any assumed threat to the grid their added capacity might create.

It resulted in many wind and solar farms having to spend tens of millions of dollars synchronous condensers – large spinning machines that do not burn fuel but which provide the same synchronous services usually provided by the coal and gas generators now exiting the grid.

But some of these syncon investments were doubling up at the same network junctions, and even network owners such as Transgrid complained that these installations were haphazard, inefficient, and probably making the problem worse. It was Transgrid’s submission that triggered this new draft ruling.

See: Do no harm? How Australia’s regulators fumbled the transition to wind and solar

In recent months, advances in technologies have helped wind and solar farms solve the issue in areas such as north Queensland by fine tuning their inverter settings. That has been done at a fraction of the cost of spinning machines, and according to a new report from the Australian Energy Market Operator, Queensland went from having the highest level of wind and solar curtailment late last year to having zero curtailment from system strength issues in the March quarter.

The next step could be the introduction of “grid forming” inverters. In the meantime, where the installation of syncons has been properly co-ordinated, as in South Australia, four new machines are due to come into service in coming months, and will largely remove the need to force gas generators to operate at times of high wind and solar generation, and will remove artificial caps on renewable energy output.

The AEMC report admits that the “do no harm” rule was “overly reactive” and not forward looking, and was also “poorly co-ordinated” and added “signifiant” costs.

It also clearly recognises that technology is changing quickly and that the network owners – who have greater visibility over grid issues and weaknesses because they manage the system – are best placed to make the call on where investment is needed.

AEMC chair Anna Collyer defended the previous rules, saying they were made in 2017 “to keep the lights on” in the face of unprecedented change in the power system.

“Since then, it has become apparent that the arrangements have created costs for consumers because they involved reacting to problems as they occurred and slowed down the connection process,” she said.

“We have applied some important lessons in evolving the framework for managing system strength, working with stakeholders over the past 10 months,” Collyer said. “Then, we were focussed on managing shortfalls of system strength. Now, we’ve re-oriented the focus to forward planning that will lower the risk of shortfalls happening in the first place.”

Collyer says under the new draft rules, new generators will still pay for any work needed, but that investment is expected to be more efficient and at significantly lower cost than in the last few years, even though much higher levels of system strength would be set by AEMO.

“The changes we’re recommending set a clear direction for how transmission networks, the Australian Energy Market Operator and new energy generators should work together to keep system voltage stable,” she said.

“Those who create the demand for system strength will still have to pay for this service – they will just pay differently and in a way that is more cost efficient both for them and the system.”

System strength was traditionally supplied by synchronous generators physically coupled to the grid, such as coal, gas and hydro. They provided it by ensuring voltage – which is like the water pressure inside a pipe – had a waveform that was very smooth and didn’t get too big or too small. Many of these generators are exiting the market or scaling back their operations.

The new draft rule will include a new obligation on transmission networks to provide the right amount of system strength when and where it is needed to keep the power system secure. The AEMC says this will maintain security while avoiding costly delays and constraints.

New access standards will be written for large loads like hydrogen, and also for new generators, like utility-scale solar and wind farms, to make sure their equipment uses system strength in an efficient way. This will create a security safety net and reduce the cost of supplying energy because overall demand for system strength will drop.

And, in a new way of charging for system strength, generators and large loads would have a choice between paying to use the system strength services that transmission networks will offer (and as the likes of Powerlink in Queensland have already proposed), or they could opt to do their own work to provide system strength (such as fine tuning inverter settings).

The new draft rule follows on from the proposed creation of a “fast frequency response” market that will deliver revenue to battery storage and wind and solar farms to deliver another service normally provided by coal and gas generators.

They form part of the overall re-design of the national electricity market rules to be unveiled shortly by the Energy Security Board, and which will come into effect in 2025. But the fast frequency response and system strength rules are considered more urgent, even though they will not likely come into effect for another 3 years.