AEMC seeks feedback on integrating energy storage into the NEM

Feedback sought by the AEMC

The AEMC is seeking feedback as to the importance of the issues raised by AEMO in its rule change request, the urgency with which these issues need to be addressed, and whether or not the issues require a regulatory solution.  Feedback is sought on a number of specific topics, which are outlined below.

Definitions for storage and hybrid facilities

Currently, the NER does not define any form of storage, with storage and hybrid technologies currently recognised as both load and generation.  AEMO's rule change request proposes to define storage and hybrid facilities, so that the NER identifies the storage and connection points with bi-directional flows.  Although these technologies have been accommodated to date, AEMO suggests that treating a single asset as both generation and load presents problems in relation to the asset's registration and participation in the NEM.  AEMO's rule change request proposes to define bi-directional units (single or aggregated storage units) and bi-directional facilities (hybrid systems where flow can be in either direction at the connection point) as follows:

Definition of storage - a bi-directional unit

Plant that has the capability to both: 

• consume electricity to convert into stored energy; and 
• convert stored energy to produce electricity, together with all related equipment essential to its functioning as a single entity.

Definition for hybrid facility - a bi-directional facility

• A facility incorporating one or more bi-directional units;
• A facility incorporating an interconnected combination of one or more: 
  • bi-directional units with generating units and/or loads; or 
  • generating units with loads, where that combination of interconnected plant: 
    
    • is connected to a transmission or distribution system at a common connection point; and 
    • can be operated such that, at any time, there may be an amount of sent out electricity or an amount of consumed electricity at the connection point.

New registered participant category

In 2018, AEMO developed interim arrangement guidelines which set out how storage units should register and participate in the NEM.  Based on these guidelines, and the requirements of the NER, participants with grid-scale storage units and hybrid facilities would typically be required to register as both a Market Generator and a Market Customer, with hybrid facilities also required to classify their units according to their technical capabilities.  The consultation paper notes that AEMO considers the current registration process to result in increased costs for both intending participants and AEMO itself, and to be overly slow, complex and uncertain.  In response to these concerns, AEMO proposes that the NER be amended to create a new registered participant category (called a bidirectional resource provider) and unit classification (called a bi-directional unit).

Technical and operational reforms

AEMO has suggested the following amendments to address certain technical and operational challenges it considers arise from the current operation of the NER:

• Scheduled storage assets will participate in central dispatch as a single asset with one dispatchable unit identifier (DUID) (if possible).  Currently, the operator of a storage facility must participate in central dispatch by providing both an offer to generate electricity (from the export component of the storage) and a bid to consume electricity (from the import component).  A hybrid facility would participate by submitting separate offers for each of its generating units and submit separate bids for each of its scheduled loads.
• Registered participants with a scheduled storage facility will submit a dispatch bid that reflects their available capacity for each trading interval, reflecting the "energy limits" of the scheduled storage unit (ie the remaining stored energy capacity).  Currently, a scheduled storage facility is obliged to provide AEMO its daily energy availability if it was energy constrained, and as all utility scale batteries in the NEM could be considered energy constrained, it is unclear how the current rules should apply to batteries.
• Performance standards of registered participants will be based on the participant's physical assets.  AEMO considers that the current application of performance standards to storage and hybrids is not appropriate, as there would be a single performance standard agreed for the connection point, but the technical requirements would differ between connecting generators and connecting loads, resulting in the requirements not being symmetrical for two sides of the same asset.