Editor’s Pick | AEMC takes forward system resilience measures

The Australian Energy Market Commission (AEMC) issued its final report on 12 December following a black system event, setting out recommendations on measures to enhance the resilience of the power system.

On 28 September 2016, there was a black system event in which around 850,000 South Australia customers lost electricity supply. The event highlighted issues with the National Electricity Rules (NER) system security frameworks and the AEMC was commissioned to conduct a review on any systematic issues that contributed to the loss of power or affected the response to it.

Since the event, AEMC said there have been a number of reforms made to enhance resilience, including for improved system strength, inertia and emergency frequency control. The Australian Energy Market Operator (AEMO) has also updated and revised operational actions. Taking account of these reforms, the AEMC has identified operational approaches to enhancing power system resilience as an area where there are further opportunities for development, in particular in relation to “indistinct” events. These are the risks associated with distributed events that act on multiple generation and network assets in an affected area over time, rather than from the failure of a specific asset.

The AEMC has made recommendations for changes to the NER framework for power system security in three areas.

The first is the implementation of a general power system risk review. This will implement a holistic review process to identify emerging risks to the power system from all sources. It will act as the “front-end” risk identification process to inform risk management actions through other mechanisms. The review will be carried out on an annual basis and be integrated with existing planning frameworks. It will involve AEMO and the transmission and distribution network service providers.

The AEMC recommended introducing “protected operation” as a new operational tool for AEMO. This will allow it to adjust the settings of the power system during abnormal conditions, such as extreme weather, to account for the increased risk that the system could be impacted. It will also enable it to take additional actions such as constraining generator dispatch, limiting inter-connector flows or directing certain generators to run. Because operating in protected mode could come at significant cost to consumers, AEMO will consult on the nature of the indistinct events it will protect the system against, what actions it will take to do so and the triggers for those actions.

In addition to the pre-defined measures, “ad-hoc” protected operation would enable AEMO to take action necessary as an emergency measure, with public reporting after the fact.

The review also recommended clarifying that AEMO and market participants must continue to comply with the NER during a period of market suspension, except in accordance with specific provisions for flexibility. These would give AEMO flexibility to determine that compliance with a rule would create a material risk to its ability to maintain power system security during a period of spot market suspension. This provision would have arrangements for transparency included.

As well as the proposed measures, AEMO recommended a programme of future work. This should look at how to better account for non-credible contingencies in the network planning process, whether the existing system standards are fit for purpose or new standards are required, and if enhancements are needed to the frameworks for load shedding and system restoration.

The concept of a protected mode, while it gives the market operator more flexibility than it currently has to manage the system, still appears very prescribed by GB standards, where incentive arrangements play a key role.


If you have enjoyed reading this article and want to read about the latest developments in energy markets around the world, please contact the Editor, Neil Mearns, for a free month’s trial.

Energy:2030 is a monthly publication covering relevant and interesting developments including:

  • market mechanisms and regulatory incentives
  • technological developments and their anticipated impact
  • changing policy as it evolves both in the UK and worldwide

Related thinking


Energy market and net zero transition learning and development: Role-relevant career development training

We’re well over halfway through the calendar year and are now beginning to see more of the government’s thinking and policy-shaping around what needs to change to meet the 2050 net zero target. For example, the flurry of documents issued towards the end of 2020, including the Energy White Paper...

Commercial and market outlook

Evaluating the benefits of local coordination mechanisms in power supply

In March, Cornwall Insight launched its new Energy Spectrum Europe publication in collaboration with the Institute of Energy Economics at the University of Cologne (EWI). Below is an extract of our Energy Perspective article from our latest issue, written by Konstantin Gruber and Nils Namockel from EWI. Local forms of coordination are...

Low carbon generation

How nuclear energy can help the UK reach its net zero goals

This article was originally written in Energy Spectrum on 21 March 2021. To find out more about a subscription to Energy Spectrum, please contact Nick on n.palmer@cornwall-insight.com. There are several challenges to reaching net zero, where its proponents believe nuclear could add value. Some of tomorrow’s main issues concern: How to provide low...

Commercial and market outlook

Celebrate with us: Our one year anniversary of Australian ‘Charts of the week’!

To celebrate our Australian ‘Chart of the week’ one year anniversary, we’ve compiled our top four selection below! One | Guess who’s back… Batteries are back… back again This ‘Chart of the week’ was an update to a previous ‘Chart of the week’ released back in October 2019. We looked at the...

Commercial and market outlook

In the midst of the Australian Energy Transformation Process

Australia is in the midst of an energy supply and distribution transformation. This transition is twofold and includes not just bridging the gap from conventional fossil fuels to renewable technologies (due to their reduced carbon footprint, lower levelized cost of energy and improved reliability levels by comparation), but also requires...


GB consultancy: Our 2020 highlights

We are independent commercial advisors to over 300 energy companies from generators, project developers, energy suppliers, network companies, investors, government departments and professional firms. Our team has over 40 years of energy market experience and works across the whole energy chain. Here is a small selection of our work in...


The top 5 podcasts of 2020

We released 13 podcasts in 2020 covering all aspects of the energy market, from the Capacity Market and Electric Vehicles to Faster Switching and heat networks. Here are our top five podcasts of the year, ranked by the number of people who listened. 5. The Impact of COVID-19 on System...

Energy storage and flexibility

DNO to DSO: A work in progress

Last month the Electricity Network Association (ENA) published updated figures regarding the procurement of Distribution Network Operator (DNO) flexibility services. This is the latest update from the ENA since April this year, with the document highlighting the historical uptake of services across the DNO regions. The publication also provides projections...