1. Power System User Requirements
Elijah Pack – Manager National Planning (AEMO)
November 2018

2. Agenda Australia’s energy transition User requirements
Australia’s energy “trilemma”
Technical Requirements
Resource adequacy
Frequency management
Voltage management
System restoration

3. The Energy Transition
Changing supply technologies – Environmental sustainability, renewables boom, ageing infrastructure, decreasing need for baseload power, growing need for energy storage and peaking.
Evolving consumer needs – Rooftop PV, electric vehicles, energy storage, flat / negative demand growth, affordability.
The grid – Adapting to changing needs on both sides of the supply chain
Structural change – regulatory liberalisation and competitive energy markets.

4. The User Requirement: The Energy “Trilemma”
Achieve a balance of:
Reliability and security
Affordability (Energy Equity)
Environmental Sustainability
Source: World Energy Council†

5. Reliability & Security – Supply interruptions
Source: Reliability Panel AEMC Final Report - Reliability standard and settings review Data represents 2007/08 to 2016/17

6. Affordability
Source: International Energy Agency, Energy Prices and Taxes 2016.

7. Electricity Bill Components

8. Affordability – Average weekly household costs
Source: Australian Bureau of Statistics

9. Sustainability LRET Target Paris commitment State based RETs
6.5 solar panels installed per minute
Policy uncertainty
Reliance on coal for baseload power

10. Global trilemma rankings
Source: World Energy Council

11. Trilemma hardship Wealthy Well educated Great natural resources
Trilemma Measurement Advantages
Trilemma Measurement Disadvantages
Wealthy
Well educated
Great natural resources
World-class solar and wind
Abundance of coal and gas
Geographically large – low population density
Per capita metrics can disadvantage Australia due to mining exports
Island – no “electrical neighbours” to support each other
Policy uncertainty
Reliance on coal
Complex climate

12. Technical Requirements“
Modern power systems are giant, multi-faceted machines. To operate the complex ‘system of systems’ in Australia’s National Electricity Market (NEM), AEMO oversees in aggregate millions of separate electricity supply and demand decisions in real time, all day, every day.
– Power System Requirements (AEMO)

13. Power System Requirements
Operability
Dispatchability
(Controllability, Firmness, Flexibility)
Predictability
Technical
Resource adequacy and capability
Frequency management
Voltage management
System restoration

14. Operability Attribute Description Dispatchability
(Controllability, Firmness, Flexibility)
Ability to manage dispatch and configure power system services to maintain system security and reliability. “Dispatch” refers to the process whereby AEMO issues instructions to generators (and certain loads) to operate at a certain output.
Predictability
Ability to:
Measure or derive accurate data on energy demand, power system flows, and generation output across numerous time frames (real time, hours/days/weeks/years ahead) as key inputs into planning and operational decision-making.
Forecast upcoming power system conditions and have confidence in how the system will perform.

15. Technical System attribute Requirement
Service(s) needed to meet requirement
Resource adequacy and capability
Provision of sufficient supply to match demand from consumers
Bulk Energy
Strategic Reserves
Capability to respond to large continuing changes in energy requirements
Operating Reserves
Network transport capability
Transmission and distribution services
Frequency management
Ability to set frequency
Grid formation
Frequency within limits
Inertial response
Primary frequency control
Secondary frequency control
Tertiary frequency control
Voltage management
Voltage within limits
Slow response voltage control
Fast response voltage control
System Strength
System restoration
Ability to restore the system
System restart services

16. Time frames for power system requirements

17. Where can these system services come from?

18. The Finkel Review
Independent Review into the Future Security of the National Electricity Market
49 out of 50 recommendations accepted by COAG
Clean Energy Target still being debated
Recommendation 5.1: “
By mid-2018, the Australian Energy Market Operator, supported by transmission network service providers and relevant stakeholders, should develop an integrated grid plan to facilitate the efficient development and connection of renewable energy zones across the National Electricity Market.

19. Integrated System Plan
Elijah Pack – Manager National Planning (AEMO)
November 2018

20. Agenda ISP Context Renewable Energy Zones Scenarios and inputs
Technical Requirements
ISP Modelling Process
Key Insights
Energy Outlook
REZ Development
System Strength
20 year integrated development plan
ISP Publication
26/11/2018

21. Energy mix and infrastructure are transforming
A profound transition of the NEM is underway: TO
Rapidly changing world:
Consumption flat, but demand peaks even more pronounced under extremes
Supplies involve geographically dispersed, technologically diverse resources
Requiring:
Flexible dispatchable plant
Energy storage
Visibility and controllability of resources, including embedded
Efficient re-configuration of the transmission system to support
FROM
A static world:
Predictable demand growth
Predominantly based on coal and gas resources
A power system designed around bulk energy transport on main highways from major (synchronous) gen centres

22. Planning Coordination

23. Context
The National Electricity Law establishes AEMO as the national transmission planner, requiring AEMO to:
develop a National Transmission Network Development Plan
provide advice on the development of the grid or projects that could affect the grid;
provide a national strategic perspective for transmission planning and coordination;
The Finkel review recommended AEMO develop and Integrated Grid Plan as part of Better system planning, one of the pillars to deliver the key outcomes.

24. Renewable Energy Zones – “REZs”
REZs are areas in the NEM where clusters of large- scale renewable energy can be developed to promote economies of scale in high-resource areas and capture geographic and technological diversity in renewable resources.
– ISP Consultation Paper (AEMO)

25. Renewable Energy Zone (REZ) Candidate Identification
Wind Solar
Source: DNV-GL

26. Renewable Energy Zone (REZ) Candidate Identification
Weighted Wind Weighted Solar
Resource quality
Correlation with demand
Land parcel density
Land cover
Road access
Terrain complexity
Population density
Protected areas
Electricity network
Source: DNV-GL

27. Renewable Energy Zone (REZ) Candidate Identification
Pumped
Hydro
Source: ANU
Source: Geoscience Australia
Geothermal

28. Candidate REZ Identification

29. REZ Candidates

30. Key inputs Resource Quality Wind and solar resource data from DNV-GL
Benchmarked against existing projects to validate
Technology
Technology costs and forward projection of costs primarily from CSIRO – confirmed by AEMO work and stakeholder consultation
Pumped storage costs from ANU study
Gas prices from Core Energy adjusted in early years to market prices
Coal prices from Wood McKenzie
Price relativities appear consistent with observed behaviour and investor interest

31. Scenarios and sensitivities
The ISP focuses on seven scenarios/sensitivities:
Two base cases:
Neutral, and Neutral with storage initiatives.
Three additional scenarios:
Slow change, Fast change, and High DER.
Two additional sensitivities to explore key opportunities or risks:
Increased role for gas, and Early exit of coal-fired generation.

32. Key Inputs – NEM Energy Consumption

33. Key Inputs – Coal fleet operating life
Note: Data is based on announced closure dates, assumption based on age and coal type, and mine rehabilitation guarantees.

34. ISP modelling process

35. A few key insights
Maintaining existing coal-fired generation up to the end of its technical life is a key element of a least-cost approach.
A portfolio approach to replacing thermal generation:
Utility-scale renewable generation, energy storage, distributed energy resources (DER), flexible thermal capacity including gas-powered generation (GPG), and transmission.
The crucial role of transmission to connect geographically dispersed renewable generation, establish REZs, and share surplus energy across the NEM
DER can greatly reduce the total cost of supply, and will benefit from more interconnection.
Focus on event-based timing and managing risks of unplanned events.

36. Projected change in resource mix
Installed capacity by NEM region over the 20-year plan horizon 

37. NEM Energy Outlook (Results)

38. Growing need for energy storage
Neutral Neutral with Storage Initiatives

39. REZ Report Cards
Benchmarking the attributes of each REZ

40. Example – Darling Downs
Renewable Resources
Solar
Wind
Diversity of Wind with other REZs
Resource Quality C B
Potential (MW)
4,000
2,785
Diversity F
Demand Matching
Now
2030
2040 D
Network Limitations
Existing
Upgraded
Network Description
Network Capacity (MW)
3,000 -
The existing network is strong and around 3,000 MW of new generation could be connected without requiring major upgrades. The MLFs are robust compared to the other Queensland REZs, because this REZ is located near the 330 kV interconnector to New South Wales and the South East Queensland load centre. Long- term modelling identified retirement of 1,400 MW of coal-fired generation in the SWQ zone from This would enable additional solar generation to connect in Darling Downs REZ within the existing transmission capacity.
Initial Loss Factor
Loss Factor Robustness A
Long-Term Market Simulation Scenarios
Neutral
Neutral with Storage
Slow
Fast
High DER
Generation Built (MW)
3,400
2,700
4,700
Timing
>2040
Example – Darling Downs
The Darling Downs REZ covers a wide area of South West Queensland (SWQ). The existing network is strong and could support around 3,000 MW of new generation without requiring major upgrades. The MLFs are robust.

41. Emerging opportunities to provide system strength

42. Impacts of low system strength

43. 20 year integrated development plan

44. Group 1 Near-term construction
Maximise economic use of existing resources

45. Group 2 Developments in the medium term
Enhance trade between regions, provide access to storage, and support extensive development of REZs

46. Group 3 Longer-term developments
Support REZs and system reliability and security

47. Economic assessment - Neutral
Present value of market benefits for Base development plan (Neutral)

48. Economic assessments
Scenario
Net benefits from interconnector upgrades ($ million)
Central cases
Neutral
$1,192
Neutral with storage initiatives
$1,249
Scenarios
Slow Change
$1,777
Fast Change
$1,499
High DER
$1,985
Sensitivities
Increased role for gas
$544
The ISP network plan delivers value in all scenarios

49. Early coal exit Base Plan Medium Very Low Base Plan with SnowyLink Low
Risk
Interconnector upgrades
Unserved energy
NSW
QLD SA
TAS
VIC
New South Wales coal power station closure
Base Plan
Medium
Very Low
Base Plan with SnowyLink
Low
Base Plan with Snowy 2.0 and SnowyLink
Victorian coal power station closure
High

50. Reliability outlook

51. ISP Published Published during project: Published in July:
Consultation Paper
Consultation submissions & summary
Assumptions workbook
Published in July:
ISP report with Appendices
Methodology
Input data and results
Interactive map

52. Way forward Implement strategic projects Market bodies’ reviews
Local transmission planners to commence regulatory assessments on strategic developments identified in group 1 and group 2 projects.
AEMO will continue to work with transmission planners via the joint planning process to progress network investments proposed in the ISP.
Implement strategic projects
AEMC’s Coordination of Generation and Transmission Investment (COGATI) review
AER consulting on draft determination on regulatory investment test application guidelines
ESB to conduct workshops looking at transmission planning and interconnection
Market bodies’ reviews
Enhance modelling capabilities
Collaborate with ENA on Open Energy Networks,
Engagement with industry to plan next ISP
AEMO’s next steps over next 6-12 months
Way forward