POWER SYSTEM SECURITY UNDER

AUSTRALIA’S EVOLVING ENERGY MARKETS

FRANK MONTIEL

2016 ENA REGULATION SEMINAR

SLIDE 2

• Technology costs, pro-active consumers, new business models and

government policies are driving:

o a changing generation mix

o changing patterns of demand

o changes in the dynamic performance of the power system

• Work is underway to determine the changes needed to rules, regulation and

policies to ensure power system security is maintained

OVERVIEW

SLIDE 3

TRANSFORMATIVE CHANGE

Large-scale generation shifts

Almost all new generation is wind

and PV

Consumer shifts

Rooftop PV, energy efficiency

In horizon: batteries,

energy management, electric vehicles

SLIDE 4

ROOFTOP PV OUTPACING LARGE SCALE WIND

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Ca

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NEM installed wind and rooftop PV

Rooftop PV NEM installed wind

SLIDE 5

THE FUTURE OF GENERATION IN THE NEM

SLIDE 6

BATTERY STORAGE

• A steady uptake in battery storage is forecast after 2021 in both the

residential and the commercial sectors.

• This is expected to be driven by

o projected retail electricity prices

o decline in battery costs

o transition to a time-of-use tariff structure.

• By 2035–36, 3.8 GW of rooftop PV capacity is expected to have integrated

battery storage, providing 6.6 GWh of energy storage potential.

o 3.8GW is comparable to total installed rooftop PV in 2015

SLIDE 7

FORECAST INSTALLED CAPACITY OF BATTERY

STORAGE

SLIDE 8

SOME OBSERVABLE TRENDS

• Non-registered

• Presence / characteristics could be unknown Registered Generation

• Distributed / embedded

• Not individually monitored

• Not centrally dispatched

Centrally Monitored Dispatched

• Output dependent on external factors• Reduction in frequency control capability under

normal and extreme circumstancesControllable

• Inverter connected and asynchronous generation

• Low inertia and weak system

Synchronous Generation

SLIDE 9

Synchronous

generationNon-synchronous

variable generation

Dispatchability

Inertia

Frequency

regulation

Fault level

contribution

Dynamic frequency

response (governor

action)

Energy

Voltage

control

Semi-dispatch

No minimum

generation level

(can be more flexible)

No start-up lead

time or costs

CHANGING GENERATION MIX –

SOME IMPACTS OF THE CHANGES

SLIDE 10

FUTURE POWER SYSTEM SECURITY PROGRAM

• AEMO is committed to ensuring we maintain security today and in the future

• Established a work program to give dedicated attention to the longer-term challenges

o Identify and prioritise the challenges

o Consider potential technical solutions

o Recommend means to deliver solutions

• Working in collaboration with others

o Working with stakeholder specialists (Technical Advisory Group)

o Working with ENA – evolving AEMO / DNSP interface

o Collaborating with AEMC

• Holding public forums and consultation through working groups and forums

• Outcomes:

o Making changes to AEMO’s internal process

o Promoting regulatory changes

o Throughout reports are being, and will be, published as they are completed

o COAG Energy Ministers mid year and report by end 2016

SLIDE 11

FUTURE POWER SYSTEM SECURITY

• Progress report to be released next week

o Identifying long term challenges

o Understanding technical solutions - underway

• AEMO has identified four high priority areas

o Frequency Control

o Management of extreme power system conditions

o System Strength

o Information, data and models

Dynamics and control

Visibility

SLIDE 12

CHALLENGES NOT PROBLEMS

While we see there are challenges in maintaining the security of the power

system in the future under some operating conditions, we are confident that

potential solutions abound

SLIDE 13

OPPORTUNITIES – CONSUMER SIDE

• Enhanced retail market offerings and rollout of advanced meters

• Home automation and the internet of things

• Smart, controlled loads and embedded generation

• Smart, controlled embedded storage

• Frequency controlled loads

SLIDE 14

OPPORTUNITIES – LARGE SCALE

• Large generators

o Synchronous generators

o Non-synchronous generators with augmented performance

• Specialist connected plant

o Synchronous condensers

o Statcoms and SVCs

o Flywheels

o Storage (batteries, pumped hydro)

• Networks

o New AC interconnectors and upgraded interconnectors

o New DC interconnectors

o Advanced protection systems and dynamic UFLS

SLIDE 15

OPPORTUNITIES – DELIVERY MECHANISMS

• Arrangements put in place should allow the right solutions to emerge, in the right context and at the right time

• Delivery mechanisms for large scale solutions could include

o Revised markets to encourage the economic delivery of required services

o Revised technical standards requiring new plant to provide additional services

o Changed Australian standards for appliances, embedded generation and storage

o New regulatory arrangements

• Solutions need to:

o be forward looking

o provide a market and regulatory environment which is adaptable to the issues in different areas of the network

o provide a flexible market and regulatory environment which is technology neutral and support innovation

o use efficient markets or incentive regulation to drive optimal outcomes

many solutions cross the boundary between networks and markets

o be tested against the National Electricity Objective

SLIDE 16

Thank you!