The Australian Energy Market Operator has been told not to overlook the growing role of distributed energy systems, and the importance of empowering energy users, as the market operator works to get in front of emerging technical issues facing the energy system.
AEMO has commenced consultation on a new ‘engineering framework’, that it hopes will help catch technical challenges triggered by the ongoing market transformation – particularly after the market bodies were caught off-guard by system strength issues.
“We need a whole of system framework, which is based on the technical needs of the system, so together we can prioritise actions that support the interests of consumers, participants, and investors during this rapid re-engineering of the power system,” AEMO said in a presentation to industry stakeholders.
Energy market operators have been left scrambling by a number of unforeseen technical issues that have plagued some parts of the energy system, often impacting new wind and solar projects being constructed at a pace faster than supporting infrastructure has been able to keep up.
AEMO was forced to direct a significant number of solar and wind projects to cut output or stop operating altogether, due to concerns about system stability. Similarly, a large number of projects have faced delays in getting connected to the electricity grid, as market operators rush to solve technical the challenges.
Some of the solutions proposed, which have included changes to energy market rules, have faced criticism for unfairly burdening new wind and solar projects with the costs of maintaining overall system security – costs often caused by poor system planning.
AEMO’s proposed ‘engineering framework’, which is being designed to increase the market body’s engagement with energy market participants and to try and identify emerging energy system issues earlier, and to make necessary infrastructure investment and implement energy market reforms before issues become disruptive.
AEMO hopes that a new ‘engineering framework’ would help catch these issues before they become massively disruptive, without restraining investment in new infrastructure.
“The NEM Power System Design and Engineering Framework is being proposed to provide this common focus and complement and support industry’s ongoing efforts, while also leveraging AEMO’s operational experience as the power system and market operator, and engineering design knowledge as the National Transmission Planner.”
AEMO has stressed that the engineering framework is not intended to replace any of the previously established planning work undertaken by the market operator, but will complement work undertaken as part of AEMO’s Integrated System Plan and the Energy Security Board’s post-2025 energy market redesign, as well as work currently underway to address some of the immediate challenges facing the energy system.
AEMO has tentatively identified a series of ten priority areas for the ‘engineering framework’, which fall in the three themes of system integration, system attributes, and system operability.
“The Engineering Framework will centre around the changing needs of the power system from an engineering design and operability perspective,” an AEMO briefing paper says.
“It will focus on what is needed to support the changing system over a rolling three- to four-year window, and seek to bridge the gap between today’s urgent operational needs and the longer-term decision-making covered by the Integrated System Plan (ISP).”
However, during a stakeholder briefing held on Tuesday, AEMO was told by several consumer advocates that any approach to energy market reform must embrace the increasing role that distributed energy resources, such as rooftop solar and battery storage.
Key to the successful management of a future energy system, AEMO was told, was a greater focus on managing energy at the distribution network level, and controlled by consumers themselves – an area that has received less attention from the major market regulators.
Stakeholders told AEMO that there are growing concerns the engineering framework may sideline the participation of consumers, which are playing an ever-growing role in producing and managing their own energy use.
The electricity system planning has historically focused on the development of large-scale infrastructure – centralised power stations and transmission network infrastructure – but consumer groups argue that this paradigm is rapidly changing.
“Instead of another mega-plan involving AEMO designing and perhaps controlling the whole system from transmission to behind the meter, what we really need from them is a paradigm shift from top-down to bottom-up thinking,” the Total Environment Centre’s Mark Byrne told RenewEconomy.
“In a high DER world that also creates opportunities for local energy sharing, the distribution system should only be responsible for meeting needs that can’t be met behind the meter — that is, by prosumers themselves.”
“Likewise, the transmission system should only be required where the distribution system is inadequate to balance supply and demand. Flip everything upside down. That is the real challenge of the future energy system,” Byrne added.
AEMO told a stakeholder briefing on Tuesday that it would continue to engage with energy market stakeholders on the development of the proposed engineering framework.
AEMO will be looking to publish a draft engineering framework in March for further consultation, with a final engineering framework expected to be established by June.