The Australian Energy Market Commission (AEMC) has signed off on new rules designed to prevent wind and solar projects from unilaterally reducing or turning off their output without warning to avoid periods of low or negative wholesale electricity prices.
The AEMC announced in November last year that it would be fast tracking its determination on the rule change, saying it was necessary to maintain system security and to introduce a greater level of ‘technology neutrality’ in the generator scheduling rules.
Revealing its final rule last week, the AEMC said “weather-reliant” generators, meaning wind and solar farms, would be prevented from reducing their output without warning unless it was the result of changes in resource availability.
Under the new rule, wind and solar projects will be expected to generate electricity in line with an output level advised by AEMO and can only fall below that output when wind and solar conditions change, and they cannot exceed the level regardless of its resource availability.
If a wind or solar generator wants to reduce its output, it will first need to inform AEMO of its intention, and then wait for a revised instruction from the market operator.
“The final rule does this by requiring semi-scheduled generators to meet a dispatch level, or cap, for how many megawatts of electricity they produce subject to variations in their natural resource (such as the sun or wind),” the AEMC said in a statement.
“The Commission’s rule change has the effect of requiring semi-scheduled generators to follow their available resource except when AEMO decides there should be a semi-dispatch interval, when output should be limited to the cap specified by AEMO.
“This could happen because of a network constraint that limits the dispatch of electricity or because it is uneconomic to dispatch a semi-scheduled generator given to the generator’s electricity market offers.”
The rule change had been initiated by the Australian Energy Regulator, following a request from federal, state and territory energy ministers through the former COAG Energy Council and had been progressed as a key market reform by the Energy Security Board.
The AER said the rule change was justified as an important measure for maintaining stable supplies of electricity and would minimise the amount of variation in output from the growing number of wind and solar projects.
The AER had noted that wind and solar projects were playing a rapidly increasing role within the energy system and that there were a growing number of instances of wind and solar projects reducing their output “far in excess” of natural resource variability, particularly during periods of low or negative wholesale electricity prices.
The rule change was supported by a number of key clean energy industry stakeholders, including the Clean Energy Council, which said in a submission that rule change was a positive change, but only if the new rules accounted for variability in wind and solar conditions.
“Semi-scheduled generators rely on the natural resource available to them to provide energy into the market.” the Clean Energy Council told the AEMC.
“This is managed by both generators and the market operator via the use of complex forecasting systems that are constantly assessing weather conditions to predict the output of semi-scheduled generators. Despite best efforts, these forecasts can be inaccurate and semi-scheduled generators can over-generate or under-generate.”
Support was echoed by the Clean Energy Investor Group, which represents a range of investors in large-scale renewable energy developments.
“Through the AER’s proposed rule change, the obligations of semi-scheduled generators will effectively align with those of scheduled generators while allowing for flexibility to deal with genuinely unexpected variation in weather in both upward and downward directions,” the Clean Energy Investor Group said in a submission to the AEMC.
The new rules will come into force on 12 April 2021.
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