Australia’s unique energy regulatory context – Part 2
June 26, 2020
Peter Brown

This is the second of two posts related to Australia’s generator regulatory framework. These posts are intended to raise awareness and inform recent or new entrants into Australia’s generation market.

In a previous post on this topic, I gave an overview of compliance obligations for new generators connecting to Australia’s National Electricity Market (NEM). In this follow up I go into further detail on Compliance Monitoring Programs. To view a diagram of the various entities involved, please refer to Part 1 of this blog.

Compliance Monitoring Programs

Compliance Monitoring Programs are comprehensive sets of procedures, processes and systems that ensure generators connected to the NEM do not have an adverse impact on system security or stability. They set out the methods by which generation assets and associated systems are routinely monitored to ensure that plant performance does not change over time, affecting compliance with the registered Generator Performance Standards (GPS).

The Australian Energy Market Commission (AEMC) has a template for compliance management that acts as a guide to generators. “The template is not an exhaustive document and is intended to assist Generators to design its own compliance programs,”[1] that is customized to the plant installed.

So, while AEMC offers a framework within which to design your Compliance Monitoring Program, there is still a considerable effort required to develop a plan specific to your asset and its associated plant and technology. In addition to the AEMC template, plans need to reference and consider a number of other documents, including:

  • Original Equipment Manufacturer documentation and testing recommendations
  • Your specific GPS as agreed with your Transmission Network Service Provider
  • Australian standards
  • ISO9000, 9001 and 9004 set of quality standards

Elements to consider for your GPS Monitoring Program

Below are some of the elements that need to be considered in designing a Compliance Monitoring Program that will meet regulatory requirements and ensure your plant does not cause issues on the network.

Change control

Compliance Plans are intended to be living documents. They must be updated:

  • Every time any part of the plant is upgraded or altered, including software or firmware upgrades.
  • Each time the AEMC issues a rule change or a new version of the AEMC template for generator compliance that requires your plan to be updated. Owners/operators have a specified amount of time to complete required updates after the National Energy Rules (NER) or AEMC templates are updated.

Robust change control procedures are at the heart of every Compliance Monitoring Program. Even the tiniest change can have significant consequences for the stability of the grid. We have seen instances where firmware updates to inverters have caused significant local transmission voltage oscillations and power quality issues.

Data capture and storage

Compliance Monitoring Programs can generate vast amounts of data, which needs to be captured and stored for use in ongoing compliance and in case of an audit by the Regulator. The electricity rules require asset owners to retain compliance records for seven years. The data to be captured and stored includes:

  • Documentation describing the as-built plant, which is kept up to date as the plant is upgraded or changed in any way.
  • Data capture from system events and tests to demonstrate the consistency of performance against the models and GPS requirements.
  • Detailed test reports demonstrating compliance with the Rules.

Testing procedures

Your Compliance Monitoring Program will need to consider what type of testing is best suited to each different piece of plant or associated technology. “The Generator should exercise diligence and good electrical industry practice to determine the detailed methods and procedures to be employed for its plant.”[2]

There are three main types of testing generators can employ.

  1. Routine periodic testing: Your Program will need to list the test done, how often it is done, the results that you need to output and who needs to sign off on the results.
  2. Continuous monitoring: This can be used to check the power quality of the plant and flag certain events that can be used to determine compliance with the GPS.
  3. Analysis of system events: This type of testing analyses events over a given time period to see if your plant performed correctly. These events may arise from your continuous monitoring. Events may be from the network around you, or from your own plant. Your Program should include a reasonable level of analysis to give reasonable confidence that you remain compliant.

Subsystems that contribute to the generating system, such as excitation systems and auxiliary power supplies, need to be included in testing. Each piece of your plant needs to have its own documented testing procedure, and these can vary for different types of plants and technology.

Quality assurance framework

The principals that underpin AEMC’s requirements for Compliance Monitoring Programs are based on the ISO9000, 9001 and 9004 set of quality standards. Generators must have a Quality Management Policy that sits over the top of their Compliance Monitoring Program. It should provide an overarching framework for testing, monitoring and analysis of plant, and ensure these are supported by adequate resources, information and processes to make certain generators can consistently meet their regulatory requirements.

Non-conformance reporting

A Compliance Monitoring Program must include processes to ensure the capture and reporting of non-conformances with your GPS. Any non-conformance that is detected, which is not immediately resolved by fixing or replacing a defective part, must be reported to AEMO.

Technical compliance audits

In January 2007, bushfires in Victoria tripped the interconnector between Victoria, South Australia and New South Wales, islanding each state’s system. The failure of several generators to meet their GPSs contributed to the event. In the wake of this incident, the Australian Energy Regulator (AER) began conducting regular spot audits to ensure generators’ Compliance Monitoring Programs:

  • “are consistent with the template for generator compliance programs published by the Reliability Panel of the AEMC
  • include procedures to monitor the performance of the participant’s generating plant in a manner that is consistent with good electricity industry practice
  • are modified to be consistent with any mandated amendments to the above template by the Reliability Panel
  • provide reasonable assurance of ongoing compliance with each applicable performance standard.”[3]

Subsequent events such as the South Australia blackout resulting from an adverse weather event have also reinforced the need for, and importance of, maintaining adequate compliance documentation.

Further information

If you’re a new or recent entrant into Australia’s generation market, find out more about how we can help you with your compliance requirements.   If you’d like to make an appointment to understand how Compliance Monitoring might apply to you, please get in touch.