New Energy Bulletin: Draft report released detailing amendments to Inertia Requirements Methodology

On 25 September 2024, AEMO released its draft determination and draft methodology on amendments to the Inertia Requirements Methodology (Draft Inertia Requirements Methodology) which are expected to take effect from 1 December 2024.¹

The Inertia Requirements Methodology is the process AEMO uses to determine the inertia requirements of each region of the National Electricity Market (NEM) for the maintenance of a steady grid frequency.²

Purpose of the amendments

AEMO’s amendments aim to ensure inertia stability in the NEM.

The need for inertia stability is driven by the difference in inertia characteristics between renewable generation assets and the replaced legacy generation assets in the NEM which threatens grid stability if not managed appropriately.

Following these amendments, AEMO will be able to:

1. Model expected changes in the supply and demand of electricity as well as changes in the electricity network over a 10-year horizon;
2. Assess the impact of contingency events (such as the removal of energy production facilities) in light of different network parameters such as voltage levels, load characteristics, transmission systems, and generation capacity; and
3. Leverage satisfactory inertia level requirements to consider credible contingency events (such as an unexpected change in output of one or more operating energy producing facilities) which may lead to the formation of island grids.³

Affected stakeholders

AEMO’s amendments will mainly affect:

1. Transmission Network Services Providers’ (TNSP) ability to procure inertia; and
2. The requirements for assets such as generators and battery energy storage systems (BESS) to provide inertia to TNSPs.

Importantly, TNSPs will be required to procure inertia to meet requirements starting from 1 December 2027.⁴

AEMO Consultation Notice

As a part of the Draft Inertia Requirements Methodology, AEMO will:

1. Allocate inertia based on the requirements of specific sub-networks and vary the total inertia in power system simulations to assess the system wide level of inertia;⁵
2. Consider the following when forecasting and determining the likelihood of sub-network islanding:
   1. level of inertia typically provided in each inertia sub-network, considering typical patterns of dispatched generation in central dispatch;
   2. time period and extent of inertia typically provided in the inertia sub-network;
   3. inertia sub-network allocation for the inertia sub-network and other close inertia sub-networks;
   4. impact of contingency events such as an unplanned change in load; and
   5. other matters AEMO considers relevant,⁶  such as evidence from historical islanding events; and
   6. frequency or likelihood of non-credible events being reclassified as credible in operational timeframes;⁷

3. Incorporate the inertia network service specification into the methodology and utilise insights from the Voluntary Specification for Grid-forming Inverters: Core Requirements Test Framework⁸ to inform its specification for synthetic inertia providers; and

4. Estimate by simulation the equivalent inertia supplied by non-synchronous providers when considering whether an inertia service provider’s services and equipment will contribute to the operation of an inertia sub-network in a satisfactory operating state.⁹ AEMO will make this assessment using the swing equation to quantify synthetic inertia.¹⁰

Invited consultation

AEMO’s consultation on proposed amendments to the inertia requirements methodology is focused on developing the methodology that will provide the minimum requirements and performance parameters for assets wishing to provide inertia to the NEM.¹¹

As such, the Inertia Methodology will be of particular relevance to:

• developers of BESS projects as the sub-network location of BESS projects will determine the value of the inertia services they provide; and
• designers and suppliers of BESS equipment to be eligible to provide inertia services, such equipment will need to meet minimum requirements.

Interested parties should provide written submissions on the draft proposal and issues identified within the draft report to 2024_security_consultations@aemo.com.au by 5:00pm on Wednesday, 23 October 2024.

The Hamilton Locke New Energy team is available to discuss how the determination and methodology may affect your BESS projects or BESS equipment design and to assist in making a submission in relation to the draft proposal.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.

¹AEMO, Amendments to the Inertia Requirements Methodology Draft Report – Standard Consultation for the National Electricity Market (25 September 2024) 3 <https://aemo.com.au/-/media/files/stakeholder_consultation/consultations/nem-consultations/2024/amendments-to-the-inertia-requirements-methodology/draft-inertia-requirements-methodology-determination.pdf?la=en> (‘Amendments to the Inertia Requirements Methodology Draft Report’); This consultation is now in its second stage, with a number of stakeholders providing responses in the first stage of the consultation, including Tesla, Shell Energy, and Transgrid.

²Australian Renewable Energy Agency, What is Electricity Grid Inertia? (Web Page, 16 November 2022) https://arena.gov.au/blog/what-is-electricity-grid-inertia/.

³Australian Energy Market Operator, Draft Inertia Requirements Methodology Determination (2024) https://aemo.com.au/-/media/files/stakeholder_consultation/consultations/nem-consultations/2024/amendments-to-the-inertia-requirements-methodology/draft-inertia-requirements-methodology-determination.pdf?la=en.

⁴Ibid.

⁵Ibid 3, 12-14.

⁶AEMO, Final rule in mark-up (28 March 2024) 5.20B.2(d) <https://www.aemc.gov.au/sites/default/files/2024-04/Final%20Rule%20-%20in%20mark%20up.pdf>.

⁷Amendments to the Inertia Requirements Methodology Draft Report (n 2) 3,4, 14-15.

⁸AEMO, Voluntary Specification for Grid-forming Inverters: Core Requirements Test Framework (January 2024) <https://www.aemo.com.au/-/media/files/initiatives/engineering-framework/2023/grid-forming-inverters-jan-2024.pdf?la=en>.

⁹AEMO, Final rule in mark-up (28 March 2024) 5.20.4(g)(2) <https://www.aemc.gov.au/sites/default/files/2024-04/Final%20Rule%20-%20in%20mark%20up.pdf>.

¹⁰Amendments to the Inertia Requirements Methodology Draft Report (n 2) 4, 15-22.

¹¹We note that the consultation is in its second stage and seeks responses on the draft methodology, which was developed following the publishing of a consultation paper in July 2024 which attracted submissions from key stakeholders, including Tesla, Shell Energy, and Transgrid.