21 June 2018

AEMC proposes changes for generators seeking to connect to the national electricity grid

The AEMC is currently considering implementing a rule change that proposes "a flexible approach to setting standards that enables targeted, least-cost ways of connecting new generators". The rule change amends:

  • the negotiation process for generators wishing to connect to the transmission network; and
  • the technical requirements for connecting generators to the transmission network.

The AEMC have set up a web page which provides additional information as well as downloadable copies of the AEMC information Sheet and the draft AEMC determination.

Summary of proposed amendment

The proposed amendments to the National Electricity Rules are primarily aimed at addressing the changing energy mix as the number of asynchronous generators (ie wind/solar) grows and distributed generation increases, with the overall goal of ensuring that the power system remains in a secure state.

The rule change modifies the existing rules in two ways:

  • it streamlines the connection negotiation process by clarifying the requirements that applicants must comply with and the information that they must provide when proposing negotiated access standards; and
  • it imposes more strenuous technical requirements on generators through the imposition of higher access standards.

Connection negotiation process

Once the rule commences, applicants will be required to propose a level of performance that is as close as practicable to the automatic access standard, having regard to a limited set of criteria (eg the need to protect the plant from damage and the commercial and technical feasibility of doing so).

Applicants will also be required to provide the network service provider and AEMO with reasons and evidence as to why the proposed negotiated access standard is appropriate.

Change to performance standards

The draft determination also proposed a number of changes to the technical requirements under the automatic and minimum access standards that generators need to meet in order to have their connection agreement authorised by AEMO.

These technical requirements generally relate to a generation plant’s ability to:

  • control their active power output and limit their contribution to frequency and voltage disturbances;
  • supply and absorb reactive power where this service is needed;
  • inject and absorb reactive current during disturbances; and
  • maintain operation in the face of certain frequency and voltage disturbances.

These proposed amendments to the technical requirements may increase the capex costs of a generator project and/or lead to delays in project development as projects assess whether they can meet the automatic access standard, and then provide evidence as to why this standard cannot be met by the generator.

Transitional arrangements

Transitional arrangements have been proposed for:

  • existing connection enquiries;
  • existing applications to connect;
  • existing offers to connect; and
  • existing connection agreements.

These transitional arrangements are quite detailed and nuanced in their application, and we think that parties seeking to rely on these transitional provisions will need to work very carefully thought the Rules to ensure that they meet the criteria before seeking to rely on them.

We expect that the regulators will also be seeking to do the same to ensure that the performance of the system is not impacted by grandfathered connections.

Next steps

The AEMC is currently accepting stakeholder submissions in response to the draft rule determination until 13 July 2018, with the changes currently scheduled to take effect from 2 October 2018.

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