AEMC- Inertia Ancillary Service Market Consultation Paper (submissions by 3 October 2017)

The AEMC has published a consultation paper seeking stakeholder feedback on a proposed approach for introducing a market mechanism for inertia. This mechanism is being considered through a rule change request from AGL for an inertia ancillary services market.

The paper builds on The AEMC’s recent draft rule to place an obligation on Transmission Network Service Providers to procure the minimum levels of inertia, or alternative frequency control services, needed to maintain system security in all regions of the national electricity market.

While that draft rule provides for a minimum level of inertia, the AEMC has stated that it considers that the introduction of a market to obtain and pay for inertia above this minimum level would provide additional benefits.

The introduction of a market based mechanism to realise the benefits of inertia was one of the key recommendations in the AEMC final report on the System security market frameworks review, published in July 2017.

Stakeholders are encouraged to provide input on the proposed mechanism, including the various funding options for paying providers of inertia. Submissions are due by Tuesday 3 October 2017.

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