Wind and solar face new connection rules, share of system strength costs

New wind and solar projects will be required to meet new technical connection standards, as well as being liable for a share of some network investment costs, in a new plan proposed by the Australian Energy Market Commission (AEMC) as it seeks a solution to system strength issues.

The AEMC has proposed a new framework to manage system strength, finding that a new set of energy market reforms was required to manage the exit of coal generators and the growth of solar and wind.

The AEMC’s new framework will establish a new network planning standard, that will require high levels of ‘system strength’ to be maintained in the grid, a new set of technical standards for generators connecting to the grid and new mechanisms for coordinating and sharing the costs of system strength investment.

Under new technical standards, generators will be required to demonstrate an ability to continue operation even during periods of low system strength, and the ability to ride through fluctuations in the grid voltage. The AEMC sees the new standards as necessary for managing the ‘demand’ for system strength services, by minimising the burden of new generators connecting to the network.

The AEMC will also establish a new market mechanism, to facilitate the sharing of the costs of maintaining system strength between generators and network companies, as well as providing a signal to the market for where new investment in system strength support is required to be made by network companies, such as the installation of synchronous condensers.

Under the AEMC’s proposal, AEMO will be tasked with preparing an annual system strength report, based upon the work undertaken for the Integrated System Plan, which will guide how transmission network companies are to propose new network infrastructure investment consistent with what is necessary to maintain system strength inline with the new standard.

AEMC acting chair Merryn York said the changes were designed to streamline the network connection process for new projects, while ensuring all sides of the energy market were engaged in managing and responding to system strength issues.

“The changes we’re recommending will improve the connection process for new generators and set a clear direction for how transmission networks, the market operator and generators should work together to keep system voltage stable,” York said.

“We’ve applied important lessons since we stepped in three years ago to make urgent system strength changes as stability problems emerged in the power system. Now we are looking to the future.”

System strength relates to the ability of an electricity grid to manage and ride through fluctuations in grid voltage that are caused by changes in energy supply and demand. Generally, this stability has been maintained by synchronous generators, which include generators running large turbines which spin in coordination with the grid frequency, but which are beginning to be displaced by lower-cost wind and solar generation.

Solar, wind and battery storage generally don’t offer the same levels of grid stability services, being considered inverter-based resources, that use inverters, rather than spinning turbines, to supply electricity at the grid frequency. Inverter-based resources are generally more susceptible to being impacted by voltage fluctuations, and have raised concerns about decreasing system strength in high penetration parts of the grid.

The issue has seen a large number of wind and solar projects curtailed, or ordered to stop generating altogether, to prevent a collapse of the grid, as energy market operators scramble to find a solution to system strength issues. Last week, network company Powerlink announced that it would install a large synchronous condenser in Queensland, to sell the system strength service to wind and solar projects.

The AEMC’s previous framework for managing system strength had been slammed by some energy market participants, who told the commission that it had failed to keep pace with changes in technologies, and that its poor design had contributed to falling investor confidence in the wind and solar market.

A number of energy market participants have proposed changes to the current rules for managing system strength issues, including a TransGrid proposal designed to allow network companies to be more proactive in making investments to address system strength, and Hydro Tasmania has proposed additional changes around markets for synchronous services.

The AEMC will seek feedback from energy market participants on the proposed plan, and will hold a public forum, to seek feedback on the changes on 22 October and will propose the final form of the energy rule changes following public consultation.