PIAC made a submission to the Australian Energy Market Commission’s (AEMC) direction paper on frequency control mechanisms.
We note that the energy system is currently transitioning from a predominantly mechanical to predominantly electronic electricity system. Managing system strength and stability in an all-mechanical or all-electronic system is relatively straight forward, but the transition from the former to the latter presents many challenges such as identifying the most appropriate ways to value and incentivise the services that maintain reliability and security, along with who should pay for which services and how trade-offs can be managed.
PIAC considers any market or regulatory obligation, including the mechanisms to recover their costs, must be designed to help accelerate the transition to zero emissions while allocating risks to those best placed to manage them and recover costs on a beneficiary-pays basis. It must not impose unfair obligations on new entrants to provide services that only benefit a reducing number of direct connected AC machines.