Primary frequency response rule change

PIAC responded to the AEMC’s consultation on a primary frequency response (PFR) rule change. 

PIAC considers that, given the transition the energy system is experiencing, the long-term interest of consumers in the NEM is best served by developing long-term plans to manage risks associated with uncertainty rather than relying heavily on narrow forecasts. 

We highlight increasing electronic (i.e.: inverter-based) generation and decreasing mechanical generation may require changes to the system operation in the form of inertia, frequency control and/or other services needing to be procured. 

We set out principles for allocating risk and recovering costs of frequency response, recommending costs are recovered on a ‘beneficiary-pays’ basis where possible, and risks are allocated to those best placed to manage them. 

We respond to consultation questions and highlight that while the issues raised by AEMO in its rule change request are currently an issue in the NEM, this may change in the future.