AEMO's new market signal to improve transparency and system security

2 min

The Australian Energy Market Operator (AEMO) is introducing a new market notification framework to increase transparency on actions taken to maintain power system security during challenging system operating conditions coupled with high rooftop solar photovoltaic (PV) exports.

In continuing to support increasing levels of rooftop solar PV, AEMO’s new protocol foreshadows challenging operational conditions, seeks a market-based response, and communicates actions needed to maintain system security.

AEMO Chief Operations Officer, Michael Gatt, said the market notification framework responds to stakeholder feedback for improved transparency and supports longer-term industry solutions to better utilise rooftop solar PV and flexible load.

“Today, the National Electricity Market (NEM) has 14 gigawatts (GW) of rooftop solar installed, roughly 23 per cent of total generation capacity, and this is forecast to grow to 23 GW by 2025,” Mr Gatt said.  

“These scenarios are generally only operational challenges in rare circumstances, such as when a region is at credible risk of separation or islanded from the rest of the NEM, when there are constraints or outages on the network, or under periods of bushfires or severe weather.

The network risk is currently acute in South Australia with world-leading levels of rooftop solar. In spring this year, AEMO forecasts that South Australia could at times source its total energy needs from rooftop solar PV – a world first for a gigawatt-scale power system. Similar periods could also arise in other NEM states in the coming years.

In rare circumstances and as a last resort, maintaining power system security by rooftop solar curtailment is only available in South Australia under the ‘Smarter Homes’ program. However, this can apply to other jurisdictions in the future.

An additional interconnector, Project EnergyConnect, planned between SA and NSW will increase reliability and security of the network and would further lessen the need to utilise this capability.

“We are working extremely hard to increase levels of renewable energy safely into the system. Just as we have last resort tools to manage a lack of supply, we need to ensure we have the same abilities to manage surplus of supply,” Mr Gatt said.

“As we do now, where possible generation from large units will be reduced and any other operational-based actions taken, such as cancelling planned transmission outages, before activating the ‘emergency backstop’ to curtail rooftop solar.

“The benefits to the wider community are significant, mitigating system security risks and reducing potential for widespread blackouts, and increasing the power system’s ability to continue to support new solar installations,” he said.

AEMO’s new notifications consists of three Distributed Photovoltaics (DPV) Contingency and / or Minimum System Load notices:

1: Forecast potential Contingency or Minimum System Load event and seeking a market response.

2: Advise action has been taken to maintain system security. 

3: Notify that curtailment of rooftop solar PV is occurring as a last resort because preceding actions have not been sufficient to maintain power system security.

AEMO uses a similar process to notify the market of forecast low electricity reserves, known as Lack of Reserve (LOR) notices. The notices encourage generators to bid into the market or businesses to reduce usage and inform the market of the activation of the Reliability and Emergency Reserve Trader mechanism to avoid load shedding.

For further information on the new operational protocol, please refer to AEMO’s website and fact sheet.

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