The Australian Energy Market Commission is preparing the way for changes needed in a market where system frequency will have fewer stable generators to rely on.

As unpredictable generation from wind and solar push aside dispatchable coal supply in the grid, the market for frequency control ancillary services, or FCAS, is expected to become more and more busy. So that the right levers are in place to manage a more volatile mix, the Australian Energy Market Commission has released a draft blueprint for establishing a two-second frequency services market into the National Electricity Market to keep the electricity system secure and avoid blackouts.

Fast frequency services will come largely from batteries, the AEMC says, but also from wind, solar and potentially from demand response, where energy users adapt load in response to market needs. The new services will respond in two seconds or less – compared with the existing fastest services that operate over timeframes of six seconds.

There are currently eight markets for FCAS, which help to correct any frequency deviations. Under current market rules, the fastest contingency FCAS markets require a response time of six seconds. The AEMC is proposing to introduce a new type of service called fast frequency response, with a response time of two seconds or less.

“System security is the most critical issue in the National Electricity Market and a key priority area for the commission,” said AEMC chief executive Benn Barr. “Our draft determination paves the way for valuing new types of fast-response services that can keep the system in a secure operating state – balancing electricity supply and demand in real time. Achieving that balance through stable frequency means the system can ride through most power disturbances.”

System security

Frequency on the NEM must stay within a range around 50Hz otherwise power system components such as generators and network elements may not operate correctly and trip off the system as a self-protection mechanism.

Large imbalances can be caused by faults causing large generators or large consumers to disconnect from the system or storms damaging major transmission towers.

Massive continuously spinning machinery in coal, hydro and gas-fired power stations acts as a buffer against changes in frequency but as flighty solar and wind replace them the level of inertia in the system is forecast to decline.

Fast frequency response will become very important in keeping the grid stable as we move to a highly renewable grid, which will inherently be a low-inertia system, Energy Synapse managing director Marija Petkovic said.

“Batteries are capable of responding within hundreds of milliseconds – far quicker than any other asset in the grid. Hence, batteries are already technically capable of providing fast frequency response, but because there has been no market for this service (and hence no compensation mechanism), batteries have not been compensated for providing this valuable service,” Petkovic said. “This rule change will bring us a step closer to valuing the full benefits that batteries can provide to the grid, which will in turn strengthen the investment case for battery storage.”

In time for tomorrow

The draft determination is part of a suite of long-term measures the AEMC says it is preparing to ensure security and reliability as the energy mix changes. It is the first of the new markets to value system services and introduces arrangements to allow the Australian Energy Market Operator to procure fast frequency response services.

“These ultra-fast services have never been provided before and this will introduce more flexibility into the fleet as well as spur on market innovation as solar, wind, demand-response and batteries compete to provide these sought-after services,” Barr said.

The draft determination follows a rule change request from Infigen Energy and industry consultation. Submissions to the draft are due by June 3. If approved, the changes will be in place within three years, which allows AEMO time to develop a product specification and make required IT and system changes.

The AEMC is also working on a separate rule change request from AEMO to improve incentives for primary frequency control during normal operation, with a draft determination expected by September 16.