AGENDA WA GENERATOR FORUM

Transcription

1 AGENDA WA GENERATOR FORUM MEETING: 1 DATE: Wednesday, 5 April 2017 CONTACT: WAgeneratorforum@aemo.com.au ITEM TOPIC PAPERS RESPONSIBLE ACTION 1. Welcome and confirm agenda Chair (AEMO) Note 2. Terms of Reference Scope, Purpose, Roles & Responsibilities 3. Introducing new System Management leaders 4. Power System Security and Resiliance Do we have a problem in the SWIS? Agenda item 2 cover paper Attachment 1 Chair (AEMO) Endorse Agenda item 3 cover paper Attachment 1 Agenda item 4 cover paper Attachment 1 5. Generator Interim Access Agenda item 5 cover paper Attachment 1 6. System Security Constraints in the South- West Area 7. Transition to an Independent System Operator 8. Market Participant Matters Collgar Agenda item 6 cover paper Attachment 1 Agenda item 7 cover paper Attachment 1 Agenda item 8 cover paper Attachment 1 9. Other Business Attachment 1 Chair (AEMO) Chair (AEMO) Sean McGoldrick (Western Power) Mehdi Toufan (AEMO) Nicole Markham (AEMO) Paul Elliott (AEMO) Thomas Scott-Morey (Collgar) Chair (AEMO) Note Discussion Note / Discussion Note Note / Discussion Note / Discussion Note / Discussion 10. Future agenda items Chair (AEMO) Discussion 11. Next meeting Chair (AEMO) Note Note: This meeting will be recorded to assist with minute production. WA STAKEHOLDER CONSULTATION, GENERATOR FORUM 1 of 83

2 WA GENERATOR FORUM Agenda item: 2.0 Paper #: Contact: WA Generator Forum Draft Terms of Reference Dean Sharafi Head of System Management (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WA Generator Forum (WAGF) to endorse WA generators To guide the operation of the WAGF Desired outcome: WAGF endorse the Terms of Reference 2. BACKGROUND As a part of the AEMO stakeholder engagement promise for WA developed in 2016, and following stakeholder feedback, AEMO committed to continuing quarterly Generator forums previously run by System Management. The forum aims to provide WA Generators and other relevant parties with the opportunity to raise and address issues and share information relating to the operation and functionality of the Wholesale Electricity Market (WEM). 3. DISCUSSION AEMO requests stakeholders to review and endorse the Terms of Reference WA Generator Forum to guide the operation and administrative of the Forum. The Terms of Reference will be published on the AEMO website and provide direction in terms of the Forum s objective and activities, and administrative matters including timeframes for the circulation of meeting agendas, meeting papers, and minutes. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 2.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 2 of 83

3 TERMS OF REFERENCE WA Generator Forum (WAGF) Objectives To enable effective two-way communication between AEMO, WA generators and other relevant parties and provide an opportunity to raise and address issues relating to the electricity market. To provide WA Generators and relevant stakeholders with an opportunity to share information and company insights, and discuss topics of interest as they impact WA Generators. Functions The WA Generator Forum will: Provide an opportunity for AEMO to share information on matters relevant to Generators and relevant stakeholders Provide a forum for Generators and relevant stakeholders to consider issues relating to the operation of the Western Australia Electricity Market. Allow Generators to share information about their operations. Identify stakeholder issues of common interest and action. Provide advice to AEMO on electricity market operations. Formally record the positions and views of the Forum about the electricity market. Participation The WAGF is a forum established for WA generators participating in the Wholesale Electricity Market (WEM) and other relevant parties. Individuals attending the forum are expected to have sufficient expertise and authority to consider matters on behalf of the organisation(s) that they represent, and provide the formal views of those organisations for the public record. Meetings Meetings will be held each quarter and are typically from 1.00 pm 3.00 pm Western Australia local time. Location: AEMO Office Level 17, 197 St Georges Terrace Perth WA of 83

4 Administration AEMO will prepare and distribute all meeting correspondence via and will publish meeting records on its website. AEMO will provide interested stakeholders with: An agenda 10 business days prior to the meeting. Relevant meeting papers 10 business days prior to the meeting. Draft minutes 5 business days after the meeting. Resourcing AEMO will provide chair and secretariat services to the WAGF and any working groups as well as support for the issues and progression of any action items. WAGF attendees will need to work with AEMO to prioritise actions. AEMO will make the final decision on the level of resourcing available. To avoid doubt, any expenses incurred as a result of attending meetings or activities associated with the WAGF are at the expense of the attendee s employer. For more information WAgeneratorforum@aemo.com.au Page 2 of 2 4 of 83

5 WA GENERATOR FORUM Agenda item: 3.0 Paper #: Contact: Introducing new System Management leaders Dean Sharafi Head of System Management (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WAGF to note WA generators For information 2. BACKGROUND Dean Sharafi, Head of System Management will introduce the System Management lead team at the WA Generator Forum and provide an overview of their duties. The lead team is comprised of the below personnel: Mehdi Toufan Manager, Power System and Market Planning Nicole Markham Manager, Market Operations, Governance and Integration Paul Elliot Manager, Power System Operations WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 3.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 5 of 83

6 SYSTEM MANAGEMENT Dean Sharafi Head of System Management Nicole Markham Manager Market Operations, Governance and Integration Mehdi Toufan Manager Power System and Market Planning Paul Elliot Manager Power System Operations SLIDE 1 6 of 83

7 WA GENERATOR FORUM Agenda item: 4.0 Paper #: Contact: Power System Security and Resiliance Dean Sharafi Head of System Management (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WAGF to note WA generators For information Desired outcome: N/A 2. BACKGROUND This presentation discusses the changes in Power System and the role of AEMO in managing the power system security and resilience. Power systems have undergone a major change during the last decade requiring a forwardlooking approach on how the operation of the grid, designed to the old paradigms, can ensure the objective of both efficiency and reliability. The changing generation mix in the WEM will affect the operation and dynamic performance of the grid. This will require AEMO to adapt its processes and procedures to reflect this changing dynamic, together with proactively influencing policy and rule change processes to meet our vision of energy security for all Australians. In this presentation we will highlight these changes and communicate what we consider the response should be from different players in the market to achieve a resilient grid in the SWIS. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 4.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 7 of 83

8 POWER SYSTEM SECURITY DO WE HAVE AN ISSUE IN THE WEM? April 2017 Generator Forum PRESENTED BY DEAN SHARAFI SLIDE 1 8 of 83

9 SESSION OBJECTIVES Discuss Changes in Power System and the role of AEMO Discuss challenges and opportunities in the WEM Highlight AEMO s thinking on future power system security and resilience SLIDE 2 9 of 83

10 ABOUT AEMO AEMO has operational responsibilities across gas and electricity In electricity, AEMO is the o power system operator o market operator The National Electricity Market (NEM) East South West Interconnected System (SWIS) - WA SLIDE 3 10 of 83

11 STRATEGIC OBJECTIVES Power System: The changing generation mix is changing the operation and dynamic performance of the grid. This will require AEMO to adapt its processes and procedures to reflect this changing dynamic, together with proactively influencing policy and rule change processes to meet our vision of energy security for all Australians. Markets: The changing needs of the future power system will drive a need to assess current market frameworks, changes to these frameworks, and the potential design of new markets. Security and Reliability: In the context of the changing mix of supply, the adequacy of technical performance capability for new entrant generators should be the focus. SLIDE 4 11 of 83

12 STRATEGIC CHALLENGE The electricity system is evolving from the traditional Centrally scheduled generation Transmission Distribution with a passive end user paradigm to a more Distributed, intermittent and renewable generation with blurred transmissiondistribution model and active end users with local small scale generation and storage model. SLIDE 5 12 of 83

13 SOME OBSERVABLE TRENDS Registered Generation Non-registered Presence / characteristics could be unknown Centrally Monitored Dispatched Distributed / embedded Not individually monitored Not centrally dispatched Controllable Intermittent generation Reduction in frequency control capability under normal and extreme circumstances Synchronous Generation Inverter connected and asynchronous generation Low inertia and weak AC system SLIDE 6 13 of 83

14 Generation - Synchronous Coal Hydro Gas SLIDE 7 14 of 83

15 Non-synchronous Wind Rooftop PV Utility-scale PV SLIDE 8 15 of 83

16 WHAT IS INERTIA? For the power system this means: o High inertia slow change in frequency following a disturbance o Low inertia fast change in frequency following a disturbance Inertia is provided by synchronous machines 50.0 DEM GEN SLIDE 9 16 of 83

17 WHAT IS THE SITUATION IN THE WEM? Generation Mix 2012 Generation Mix , ,120 Coal Gas Liquid Renewable 207 3, ,120 Coal Gas Liquid Renewable Generation Mix 2018* 1,308 1, Coal Gas Liquid Renewable * Based on projections and assumptions 3,265 SLIDE of 83

18 INSTALLED ROOF-TOP PV CAPACITY 700,000 Cumulative SWIS Roof-top PV Capacity (kw) 600, , , , , ,000 0 Dec2010 Feb2011 Apr2011 Jun2011 Aug2011 Oct2011 Dec2011 Feb2012 Apr2012 Jun2012 Aug2012 Oct2012 Dec2012 Feb2013 Apr2013 Jun2013 Aug2013 Oct2013 Dec2013 Feb2014 Apr2014 Jun2014 Aug2014 Oct2014 Dec2014 Feb2015 Apr2015 Jun2015 Aug2015 Oct2015 Dec2015 Feb2016 Apr2016 Jun2016 Aug2016 Oct2016 Dec2016 Feb2017 SLIDE of 83

19 DAY-TIME MINIMUM LOAD PROFILE SLIDE of 83

20 AVERAGE DAILY LOAD PROFILE SLIDE of 83

21 WHAT IS ON THE HORIZON? Roof-top PV increase to 650 MW 100s MW of non-synchronous generation wanting to connect Retirement of 380MW of Synergy generation This will affect the existing system resilience. SLIDE of 83

22 WHAT NEEDS TO BE DONE? Distinguish between capacity, valuing capability, flexibility and geographical diversity Require system-needed characteristic from all generators Compensate for lack of inertia from the already installed inverter-based generation Review the Residential Tariff model to ensure fitness for current situation Dynamic Market Rules/Regulation. SLIDE of 83

23 AEMO S APPROACH AEMO is providing recommendations on amended licence conditions for South Australia. These recommendations will directly affect a number of known generation investment Recommendations are likely to be adopted by the Clean Energy Finance Corporation for projects it invests in and by the Victorian government in its drive to achieve its renewable energy targets Eventually they are expected to be the basis of updated technical standards in the NEM Rules It is wise to believe the same will be applied to WEM. SLIDE of 83

24 KEY ADDITIONAL LICENCE RECOMMENDATIONS FOR NEW ENTRANT PLANT IN SOUTH AUSTRALIA Existing licence conditions for fault-ride-through and reactive power to be retained, as well as: Frequency control services: a) Provision of frequency control capability b) AGC Control Ramp rate controls Voltage and frequency disturbance ride-through capabilities The ability to assist in system restoration following a black system event. SLIDE of 83

25 RECOMMENDATION FOR WA New entrants note the additional generator performance standards highlighted here including Synthetic Inertia capability and adapt accordingly AEMO is working closely with the players in WA market to ensure security and resilience of the grid is maintained. SLIDE of 83

26 DISCUSSION Thank you! SLIDE of 83

27 WA GENERATOR FORUM Agenda item: 5.0 Paper #: Contact: Generator Interim Accesss Seán McGoldrick Executive Manager Asset Management (Western Power) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: N/A N/A WAGF to note WA generators For information 2. BACKGROUND Seán McGoldrick, Executive Manager, Asset Management from Western Power will provide an overview of the proposed Generator Interim Access (GIA) solution which will support the connection of new generators on a constrained access basis. The deferral of the government s plans to regulate Western Power s network under the National Electricity Law, which included the adoption of a constrained network access regime under the National Electricity Rules, has meant that Western Power s ability to connect new large scale generation to its network is limited. With a number of new generation projects progressing their connections to the Western Power network, it is necessary to develop a solution (the GIA) to support these connections in advance of the anticipated implementation of AEMO s market systems. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 5.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 27 of 83

28 Generator Interim Access (GIA) solution EDM of 83

29 Purpose 1 To provide an update on developments with generator network connections given the current status of the Electricity Market Review (EMR) Reforms, and in particular the proposed Generator Interim Access (GIA) solution of 83

30 Background 1 Western Power s ability to connect new large generators to its network is limited. Previous CAG solution to connect new generation on a constrained basis terminated due to the proposed EMR reform to introduce fully constrained access from July A number of projects were progressing on the expectation of fully constrained access. The deferral of the EMR legislation resulted in significant risk to these project investments, and consequential impact to the ability of retailers to meet their LRET obligations from local suppliers. A solution was required to facilitate the connection of these projects of 83

31 An interim solution 1 Any move to a fully constrained access regime is a decision for the new government. Prior to this, it is expected that endorsed WEM reforms* and the implementation of AEMO s market systems will continue to be progressed and will: replace the GIA solution for new generator connections beyond mid-2019 maintain the contracted unconstrained access of existing generators. Western Power, AEMO and the PUO have investigated potential interim solutions to connect generators in 2018 / 19. The Generator Interim Access (GIA) solution is now being progressed. * Final Report - Design Recommendations for Wholesale Energy and Ancillary Service Market Reforms 4 31 of 83

32 The GIA solution 1 Applicable to new generators that are registered in the WEM ie: 10MW and above. Potential to extend to generators less than 10MW. This solution will utilise: an existing market mechanism, a Network Control Service (NCS) contract (between Western Power and the Generator), and a new tool to be developed by Western Power and utilised by AEMO. The NCS contract: will allow AEMO to constrain new generators outside of the normal Balancing Merit Order process to maintain system security. results in the GIA generator not receiving constrained-off compensation of 83

33 The GIA tool: 1 6 will determine maximum permissible GIA generator output in real-time (independent from the dispatch process). will cycle every few minutes to identify potential network overloads. will determine the quantity that the GIA generator will need to be constrained (on a pre-contingent basis) to ensure the system remains in a secure state should a contingent event occur. will aim to minimise runback the biggest contributor to the constraint will be constrained first. will only consider the new generators connected under the GIA solution will not constrain existing generators ie: not affect their contracted unconstrained access. existing post contingent runback schemes will not be affected. will constrain the GIA generator automatically, and issue an Operating Instruction, overriding any previously issued dispatch target. will not support part unconstrained / part constrained capacity. 33 of 83

34 The GIA solution 1 Target In Service timing: Q Indicative Cost: $2.5M to be recovered from new generators connecting under the GIA solution. No major amendments required to the WEM Rules. minor amendments are desirable to support the practical operation of the tool, provide clarity, and improve transparency. The GIA solution is not scalable and is a short term solution. It is anticipated that the GIA tool will be replaced by AEMO s market systems if they are implemented in mid AEMO s constrained dispatch engine will: integrate the constraint of new generators into the dispatch process provide visibility of expected future network congestion to the market provide significant additional capability to manage dispatch and system security of 83

35 Roles and Responsibilities 1 WP will build the GIA tool with design support from AEMO. The GIA tool will be operated by AEMO. Next Steps April - June 2017 Progress the design the GIA solution. Further advice to customers GIA operation, customer obligations. Draft and progress WEM Rule changes of 83

36 Generator Interim Access (GIA) solution EDM of 83

37 WA GENERATOR FORUM Agenda item: 6.0 Paper #: Contact: System Security Constraints in the South-West Area Mehdi Toufan Power System & Market Planning Manager, WA (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WAGF to note WA generators For information 2. BACKGROUND This presentation provides an insight into how AEMO manages the security of supply in South West region of WA during the forecasted high load periods to minimise involuntary load shedding considering inherent security contraints. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 6.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 37 of 83

38 SYSTEM SECURITY CONSTRAINTS IN THE SOUTH-WEST AREA April 2017 MEHDI TOUFAN, MANAGER POWER SYSTEM & MARKET PLANNING 38 of 83

39 SYSTEM SECURITY CONSTRAINTS IN THE SOUTH-WEST AREA 1. SWIS Overview 2. The South-West Area 3. South-West 132 kv System 4. Demand Profiles 5. Constraints 6. South-West Forecasting 7. Dispatch Trigger 39 of 83

40 SWIS SCHEMATIC 40 of 83

41 SWIS SCHEMATIC CONT. 41 of 83

42 SWIS SCHEMATIC CONT. 42 of 83

43 SOUTH WEST DEMAND PROFILE 43 of 83 6

44 SYSTEM MANAGEMENT S APPROACH TO SYSTEM SECURITY At any given time: Is the system secure during and after an N-1 event? N-1 Supply Expected Demand 44 of 83

45 SYSTEM MANAGEMENT S APPROACH TO SYSTEM SECURITY CONT. 45 of 83

46 SYSTEM MANAGEMENT S APPROACH TO SYSTEM SECURITY CONT. Until local generation can correct the supply deficit, the SWIS is at risk of involuntary load shedding Time delay to start 46 of 83

47 LOAD FORECASTING 47 of 83

48 PROCESS TO COMMIT / DISPATCH ADDITIONAL GENERATION WEM Rules have short comings relating start up period AEMO has developed internal process to manage security within SW It is non binding and invites Generators cooperation to manage the risk Trigger criteria: o Two or more consecutive days forecast > 405 MW o Single day forecast > 435 MW Commitment Notice sent to generator for potential dispatch Review the power system security 24 hours ahead of forecast high demand o Send Dispatch Instruction if required 48 of 83

49 KEY ASSUMPTIONS 6MW local wind generation WAPL 25 MW import Radialise network 49 of 83

50 Q&A 50 of 83

51 WA GENERATOR FORUM Agenda item: 7.0 Paper #: Contact: Transition to an Independent System Operator Paul Elliott Power Systems & Market Operations Manager, Markets (AEMO) Nicole Markham Market Operations, Governance and Integration Manager, System Management WA (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WAGF to note WA generators For information Desired outcome: N/A 2. BACKGROUND AEMO took accountability for system operations for the SWIS on 1 July 2016, and became responsible for the System Management functions in the SWIS on 31 October To support this transition, a Services Agreement was established between AEMO and Western Power to provide a range of services. These include the facilities at East Perth, IT support for the current market dispatch systems, personnel to fulfil roles whilst AEMO trains new recruits, and some limited residual system operational services. There has been an extensive recruitment process to enable AEMO to carry out its System Management functions. The new recruits are undergoing extensive training in the systems, processes, procedures and WEM rules to ensure the ongoing operation of the Real Time Operation of the WEM. Transition activity is focused on establishing the necessary changes to allow System Management to operate independently once these contracted support services come to an end. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 7.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 51 of 83

52 TRANSITION TO AN INDEPENDENT SYSTEM OPERATOR April 2017 NICOLE MARKHAM - MARKET OPERATIONS, GOVERNANCE AND INTEGRATION MANAGER, SYSTEM MANAGEMENT WA (AEMO) PAUL ELLIOTT - MANAGER POWER SYSTEM OPERATIONS SLIDE 1 52 of 83

53 BACKGROUND System management functions of the WEM were transferred to AEMO on 1 July Currently AEMO has a Services Agreement with Western Power to provide services to AEMO. These services include the facilities at East Perth, IT support for the current market dispatch systems, personnel to fulfil roles whilst AEMO trains new recruits, and some limited transitional system operational services. SLIDE 2 53 of 83

54 TRANSITION UPDATE Transition activity is focused on establishing the necessary changes to allow System Management to operate independently from Western Power once the contracted support services come to an end. AEMO integration has commenced, including both corporate and governance related integration. All controller and planner roles have been filled. SLIDE 3 54 of 83

55 FACILITY UPDATE AEMO s consolidation into a single WA office in the Central Park building on St Georges Terrace remains on track for September A number of business processes have been identified that will be impacted by the physical separation from Western Power. Identifying and implementing changes to high priority processes is now well advanced, targeting completion by end June 2017 to allow sufficient time for testing. New communications between the WA office and Western Power will enable System Management to continue to access the current market dispatch systems. In accordance with the Services Agreement, Western Power will continue to provide back up control room facilities for AEMO use. SLIDE 4 55 of 83

56 PRE - 1 JULY 2016 Network operations, system security and generation dispatch conducted by Western Power Western Power Generation dispatch System security Network operations SLIDE 5 56 of 83

57 1 JULY 2016 AEMO responsible for System Management function of the SWIS - System security and generation dispatch Western Power Network operations AEMO Generation dispatch System security SLIDE 6 57 of 83

58 FUNCTIONS Generation dispatch AEMO utilising Western Power systems and facilities to perform this function New staff undertaking intensive training System security AEMO has contracted the majority of this function to Western Power whilst establishing capability System security desk to be: - Defined - Training developed and delivered - Desk stood up SLIDE 7 58 of 83

59 TRAINING 14 Controllers 4 Planning Engineers 1 Principal Engineer Significant task requiring time and resourcing SLIDE 8 59 of 83

60 WHAT TO EXPECT AEMO staff actively referring to Systems, Processes, Procedures and Rules Referrals from one area to another. For example - From Control Room (Real Time) to Planning or SM Market Operations for outage requests and queries Clarifying questions or requests to create understanding and knowledge within new staff Learning and development of experience SLIDE 9 60 of 83

61 WA GENERATOR FORUM Agenda item: 8.0 Paper #: Contact: Market Participant Matters Dean Sharafi Head of System Management (AEMO) Date: Wednesday, 5 April EXECUTIVE SUMMARY Item raised by: Previous forum discussion(s): Item impact: Impacted parties: Purpose: AEMO N/A WAGF to note/discuss WA generators For information/feedback/discussion Desired outcome: N/A 2. BACKGROUND The WA Generator Forum provides an opportunity for AEMO and Market Participants to share information on matters relevant to WA Generators and relevant stakeholders. This agenda item provides stakeholders with an opportunity to share experiences, and provide updates on issues of interest to all generators. AEMO values Market Participants contribution and encourages Market Participants to contact the Chair with items they wish to present to the forum. WAGF MEETING 5 APRIL 2017 AGENDA ITEM: 8.0 PAGE 1 OF 1 THIS PAPER HAS BEEN PREPARED FOR CONSIDERATION OF THE WAGF AND THE PROPOSALS AND/OR VIEWS EXPRESSED HEREIN DO NOT NECESSARILY REFLECT THE VIEWS OF THE CF UNTIL SUCH TIME AS AND TO THE EXTENT THAT THE CF CHOOSES TO ENDORSE THE CONTENT IN WHOLE OR IN PART. 61 of 83

62 WA Generator Forum 5 April of 83

63 WA Generator Forum 5 April 2017 Issues Affecting the WA Electricity Industry: Pace Of Technology Approaches Towards Change Anachronisms Best Practice Opportunities Risks / Cautions Policy on Purpose 5/04/2017 WA Generator Forum 5April2017.pptx 2 63 of 83

64 Pace Of Technology Changes are accelerating effects can be difficult to predict Influencing every part of our lives Differential absorption sometimes counter-productive Information more readily available & more usable Increase in A.I. and smart assets more automated decision-making 5/04/2017 WA Generator Forum 5April2017.pptx 3 64 of 83

65 Approaches Towards Change Reactive vs proactive (or both) Industry only 150 years old Many assets > 50 years old Mechanicville since 1897 Cost of upgrades expensive, rules complicated Change tends to be History++ not Grid 2.0 Consumers now leading the utilities rooftop solar PV moving peak interval Decentralization, microgrids, DC houses? 5/04/2017 WA Generator Forum 5April2017.pptx 4 65 of 83

66 Anachronisms Many legacy systems / rules still in place Yet increasingly out of place in current system Fixed system costs vs variable recovery EFLSG vs Peak SWIS Load makes sense for thermal generation Availability considerations it s different for renewables Consequential outages what s reasonable? 5/04/2017 WA Generator Forum 5April2017.pptx 5 66 of 83

67 Anachronisms EFLSG vs Load Capacity Max EFLSG CWF Max SWIS Load CWF Incr. Incr. Year Interval Prod Interval Prod Gen. R.C. (MW) (MW) (MW) (MW) 2012 / 13 7/01/ : /01/ : /01/ : /01/ : /02/ : /02/ : / 14 22/01/ : /01/ : /01/ : /03/ : / 14 24/06/ : /01/ : /02/ : /01/ : / 16 7/01/ : /01/ : /01/ : /01/ : /03/ : /03/ : Average Annual Increase in Reserve Capacity (MW) 15.3 (worth about $2M per year) 5/04/2017 WA Generator Forum 5April2017.pptx 6 67 of 83

68 Anachronisms Availability considerations 200 Thermal Plant Availablity Power Output (MW) Mar 21:00 30-Mar 18:00 30-Mar 15:00 30-Mar 12:00 30-Mar 09:00 30-Mar 06:00 30-Mar 03:00 30-Mar 00:00 29-Mar 21:00 29-Mar 18:00 29-Mar 15:00 29-Mar 12:00 29-Mar 09:00 29-Mar 06:00 29-Mar 03:00 29-Mar 00:00 28-Mar 21:00 28-Mar 18:00 28-Mar 15:00 28-Mar 12:00 28-Mar 09:00 28-Mar 06:00 28-Mar 03:00 28-Mar 00:00 5/04/2017 WA Generator Forum 5April2017.pptx 7 68 of 83

69 Anachronisms Availability considerations 200 Intermittent Plant Availability Power Output (MW) Mar 21:00 30-Mar 18:00 30-Mar 15:00 30-Mar 12:00 30-Mar 09:00 30-Mar 06:00 30-Mar 03:00 30-Mar 00:00 29-Mar 21:00 29-Mar 18:00 29-Mar 15:00 29-Mar 12:00 29-Mar 09:00 29-Mar 06:00 29-Mar 03:00 29-Mar 00:00 28-Mar 21:00 28-Mar 18:00 28-Mar 15:00 28-Mar 12:00 28-Mar 09:00 28-Mar 06:00 28-Mar 03:00 28-Mar 00:00 5/04/2017 WA Generator Forum 5April2017.pptx 8 69 of 83

70 Anachronisms Consequential outages 180 Net Output Profile Power Output (MW) WP works require switching to 1 side Mar 21:00 30-Mar 18:00 30-Mar 15:00 30-Mar 12:00 30-Mar 09:00 30-Mar 06:00 30-Mar 03:00 30-Mar 00:00 29-Mar 21:00 29-Mar 18:00 29-Mar 15:00 29-Mar 12:00 29-Mar 09:00 29-Mar 06:00 29-Mar 03:00 29-Mar 00:00 28-Mar 21:00 28-Mar 18:00 28-Mar 15:00 28-Mar 12:00 28-Mar 09:00 28-Mar 06:00 28-Mar 03:00 28-Mar 00:00 5/04/2017 WA Generator Forum 5April2017.pptx 9 70 of 83

71 Anachronisms Consequential outages Allowable outage Net Output Profile 140 Power Output (MW) hrs loss of production, not recoverable 0 30-Mar 21:00 30-Mar 18:00 30-Mar 15:00 30-Mar 12:00 30-Mar 09:00 30-Mar 06:00 30-Mar 03:00 30-Mar 00:00 29-Mar 21:00 29-Mar 18:00 29-Mar 15:00 29-Mar 12:00 29-Mar 09:00 29-Mar 06:00 29-Mar 03:00 29-Mar 00:00 28-Mar 21:00 28-Mar 18:00 28-Mar 15:00 28-Mar 12:00 28-Mar 09:00 28-Mar 06:00 28-Mar 03:00 28-Mar 00:00 5/04/2017 WA Generator Forum 5April2017.pptx of 83

72 Anachronisms Consequential outages Preferable outage Net Output Profile 140 Power Output (MW) Reduced losses, increased availability Mar 21:00 30-Mar 18:00 30-Mar 15:00 30-Mar 12:00 30-Mar 09:00 30-Mar 06:00 30-Mar 03:00 30-Mar 00:00 29-Mar 21:00 29-Mar 18:00 29-Mar 15:00 29-Mar 12:00 29-Mar 09:00 29-Mar 06:00 29-Mar 03:00 29-Mar 00:00 28-Mar 21:00 28-Mar 18:00 28-Mar 15:00 28-Mar 12:00 28-Mar 09:00 28-Mar 06:00 28-Mar 03:00 28-Mar 00:00 5/04/2017 WA Generator Forum 5April2017.pptx of 83

73 Best Practice Synthetic Inertia optimizing new capabilities Enabling Big Data (Cigré paper) use other people s wheels Use of data to drive decision across whole of system Maintenance planning flexibility coordinating outages optimizing timing to reduce losses working with contractors 5/04/2017 WA Generator Forum 5April2017.pptx of 83

74 Best Practice Enabling Big Data (Cigré paper) 5/04/2017 WA Generator Forum 5April2017.pptx of 83

75 Opportunities Carbon reduction as a policy decision cost reduction as a by-product Cohabitation with agriculture one footprint, two industries Ancillary services Fast response (300MW / min) Reactive support Economic storage a game-changer currently being implemented new technology could flip strategy 5/04/2017 WA Generator Forum 5April2017.pptx of 83

76 Risks / Cautions Intermittency nature of the technology portfolio effects of location and type smoothing with storage demand-side adaptation Over-temp & over-wind availability limits can be improved over time Unknown unknowns Harmonics, etc. Such as voltage ride-through settings range of equipment age & capabilities 5/04/2017 WA Generator Forum 5April2017.pptx of 83

77 Policy On Purpose Federal vs Market vs State vs Community Communication & coordination 25+ year investor outlook Project financeability off-taker creditworthiness cash flow predictability debt capacity Consistency & dependability or else greater policy risk assessment increased investor return expectations higher lender spread premium more expensive cost of electricity 5/04/2017 WA Generator Forum 5April2017.pptx of 83

78 WA Generator Forum 5 April 2017 Thank You! 78 of 83

79 SPINNING RESERVE 2017/2018 April 2017 TERESA SMIT, PRINCIPAL ENGINEER POWER SYSTEM AND MARKET PLANNING 79 SLIDE of 83 1

80 OVERVIEW There are currently three spinning reserve contracts that contribute to the total system requirements, the rest being supplied by Synergy. o Interruptible Load contract 42 MW expires 30 September 2023 o Interruptible Load contract 13 MW - expires 30 June 2017 o Generator contract 13 MW expires 30 June 2017 The potential changes introduced by the EMR will allow a more complete and competitive market for Ancillary Services provision. SLIDE 2 80 of 83

81 OPTIONS CONSIDERED FOR FY 2017/18 Considerations: In the short term, system security must not be impacted by changes which have not yet been proven. The impact of moving towards a fully competitive market needs to be fully understood in terms of overall cost. Participants providing Spinning Reserve must meet the technical requirements to do so and must be able to do so 24/7. Options Considered Comment 0 Allow expiring contracts to end. This does not provide the opportunity to reduce costs below the administered price. 1 Extend expiring contracts. While the contracts could be extended, there is no justification to restrict the opportunity to participate to only these participants. 2 Go out on tender for equivalent MW. There is some opportunity for non Synergy participants to participate and reduce the cost of spinning reserve made available. 3 Go out on tender for full requirements. The process of determining the reserve availability payment would have to be repeated considering the potential different volumes which Synergy would provide. This could be an iterative process depending on the number of possible participants. 81 SLIDE of 83 3

82 PRICE DETERMINATION 30 November AEMO provides a proposal for the following year for the margins to be used in the reserves availability payment [MR A (a)] December ERA undertakes a public consultation process including publishing an issues paper and an invitation for public submissions February Deadline for comments 31 March ERA publishes Margin_Peak and Margin_Off Peak parameters [MR A] SLIDE 4 82 of 83

83 GOING FORWARD The opportunity for participants to provide this service will be opened up for tender to a maximum value of 26 MW for the period 1 July June o The minimum capacity per participant will be 10 MW. Tender documents will be prepared requiring participants to indicate the following: o o Capacity available Proof of compliance to technical requirements. AEMO will work with the ERA and participants on possible enhancement to the process to further reduce the cost of providing this service for the next financial year. Further developments could be realised with the possible implementation of the EMR in the future. SLIDE 5 83 of 83