AEMC proceeds to fast-track consideration of the AER’s semi-scheduled generator dispatch obligations rule change


Today I received an email from the AEMC about this development, so (given we’d highlighted this particular consideration on WattClarity, and as it could potentially have an impact on a growing number of our clients – plus other readers here) I thought it would be worth flagging briefly this evening.

 

(A)  AER processes … now completed

Walking quickly through the processes that the AER followed:

Thu 28th May 2020

As noted on WattClarity a couple days later, we noticed a short notice from the AER alerting NEM participants and others to the request they’d received from the COAG Energy Council to develop two rule change proposals each focused on some perceived challenges with the operations of Semi-Scheduled generators:

Rule Change Proposal #1 = Continuous Disclosure

Rule Change Proposal #2 = Following Dispatch Targets

It will be important to come back to this request to understand the extent to which they have been addressed in what the AEMC is considering…

Wednesday 24th June 2020

We also notified WattClarity readers on Sunday 28th June of the publication of the AER Issues Paper.

Intervening period

In the period that elapsed between the publication of the AER Issues paper and the submission of the requested rule change to the AEMC, there were a number of developments worth highlighting here:

1)  On 9th July, triggered by an association with Elton’s song spoke about ‘Too Low for Zero’ as a parable for the AER Issues Paper?.  The three paradigms noted there are worth understanding.

2)  On 17th July, Marcelle Gannon penned some thoughts under the title ‘Semi-scheduled generation–what are the real issues?’ to seek to focus discussions on what really mattered.

3)  On 24th July I contributed some thoughts in the article ‘Striving to understand the underlying challenges with Semi-Scheduled generators (re AER Issues Paper)’

4)  We even, in a very rare event, made a formal submission to the AER processes (hence the email today from the AEMC, being in their database of interested parties – though I suspect the ‘interested parties’ category is broader than that).

… and in between all of this, a number of other interesting news articles and other publications were tagged into our Asset Catalog (emerging out of the earlier Generator Catalog) as developments and thoughts relevant to the Semi-Scheduled generators.

Wednesday 30th September 2020

On Wednesday 30th September we noted that the ‘AER releases proposed rule change for Semi-Scheduled generators and dispatch instructions.

Thursday 15th October 2020 As noted below, the AEMC approved the fast-track process.

We missed that, at the time (a few other distractions, like 13th October in QLD).

… so the ball was passed to the AEMC.

 

(B)  AEMC processes … underway

Today’s email from the AEMC says:

‘You are receiving this email because you made a submission to the AER’s semi-scheduled generator rule change consultation process.

We would like to inform you that the AER’s semi-scheduled generator dispatch obligations rule change has been initiated by the Commission using the fast track rule change process.
The fast track rule change proceeds directly to the publication of a draft determination on (Thursday) 19 November 2020. Further information is available at:

https://www.aemc.gov.au/rule-changes/semi-scheduled-generator-dispatch-obligations

While the fast track rule change process does not include formal public consultation prior to publication of a draft determination, the Commission is open to considering any additional feedback from stakeholders on the AER’s rule change request, over and above that already provided through the AER’s consultation process. If you would like to provide any feedback please contact [EMAIL ADDRESS REMOVED TO PROTECT PRIVACY ONLINE] prior to 5 November 2020.’

Specifically, I found this page on the AEMC website from 15th October that speaks about the approval of the fast-tracking process, and what it means:

2020-10-15-AEMC-FastTrack

We’ll wait to see what their draft ruling is…. as something needs to be done about the automated and not signalled curtailment at times of negative prices.

 

(C)  The challenge is broader

… however it’s worth re-iterating that the challenges of balancing supply and demand is much broader than what happens to some Semi-Scheduled plant when they automatically switch off and ramp down rapidly in a manner that (to some viewed by Paradigm 1) does not ‘honour their bid’ and is impossible for AEMO to take account of in dispatch.

For instance (and it’s not limited to just the following):

C1)  It’s about all the other instances we’re exploring in this expanding series of Case Studies where Semi-Scheduled plants are collectively delivering increasing instances of extreme collective Raw Off-Target on occasions when the simplistic theory does not hold that ‘the unders and overs will cancel out across a diverse location of wind and solar plant’.

C2)  It’s about the growing number of sub 5MW solar farms being built with automated logic (which we help with – full disclosure) to switch them off when the price is negative.  Solar Farms that have no visibility in the AEMO’s real time systems.

C3)  It’s the growing significance of rooftop PV which is eating away at the stabilisation functions of the grid and is still largely unseen and uncontrolled from the perspective of balancing supply and demand.

For instance, whilst the formulation of the constraint definitely did not help (wait for Part 5 on this), and the introduction of a syncon in northern QLD would alleviate this particular issue, what happened on Tuesday 13th October was in part a result of:
3a)  The increasing duck curve; and
3b)  The fact that its increasing significance has not been factored into market/grid systems in anywhere near the detail that will be necessary in future.

C3)  It’s the huge concern about sub 5MW batteries rapidly and automatically going either way (i.e. charge or discharge) rapidly and invisibly to the AEMO:

Coincidentally today, Dave Smith raised that same concern here at the end of Andrew Wilson’s article.

C4)  It’s a growing concern about what happens if there is coincident charging of EVs in the network of the future, that’s co-ordinated without the prime consideration being stability of the grid.

C5)  It’s the ongoing growth of spot exposed energy users who have ability to see the spot price in real time (which we help with – full disclosure) and respond to depending on their own corporate business considerations at the time… but invisible to the AEMO (and not taken account of in its dispatch processes).

C6)  It’s not only about actually balancing supply and demand in real time … it’s also about ensuring the relevant organisations (the AEMO, the AER, all Market Participants, and 3rd parties who can help – like us) can all have increased visibility of the data required to help make this transition work (in terms of each dispatch interval – but also all the longer-range time-horizons such as those neatly explained by Stephen Wilson in his diagram).

I’ve noted before (on 5th March 2019 and then on 21st October 2019) for instance, that the creation of the virtual ‘negawatt’ commodity through the Demand Response Rule Change (which commences 1st Oct 2021) without the publication of the other two pieces of the triangular data puzzle will end up making the market less transparent, not moreso!

We wrote before in the Generator Report Card 2018 that ‘the Transitional challenges require greatly enhanced Analytical Capability’ (which was Theme 14 within Part 2 of the 180-page analytical component).  We should be getting smarter, not un-learning lessons already learnt!

Cn) … the list goes on…

 

I had hoped that the processes commenced by the Energy Security Board at the request of the (now defunct?) COAG Energy Council looking at the design of ‘NEM 2.0’ would go a long way to addressing these broader issues by establishing a long-term, logical development process for transitioning to a real two-sided market.

However, I’d have to admit I gave up reading the ‘Post 2025 Market Design Consultation Paper’, and any real thought of commenting on it, when it progressively grew on me that the paper was so far off the mark in tackling all of the above.

1)  What might have initially seemed to promise a more holistic, well thought through approach seems to have devolved into yet more overlapping incrementalism (potentially worse because of more ‘left hand does not consider what right hand is doing’ at different levels).

2)  Perhaps I was overly hasty in not reading all the way through, but the underwhelm I felt meant I prioritised other things.  If I felt that, then how many others felt the same way?

Where to from here?  Is ‘NEM 2.0’ a damp squib?

Perhaps we all have to wait for ‘NEM 3.0’ …. but seems clear that the transitioning energy sector can wait that long!

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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