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The operator of the national energy markets has warned that the electricity market is out of date and needs to be overhauled following technological change, which has thrown up a series of challenges that threaten confidence in the nation's power supplies.
"Security on the [national electricity market] is now less certain than when it was designed," the chairman of the Australian Energy Market Operator, Anthony Marxsen, told a business lunch in Adelaide.
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"The [national energy market] rules were written for a different age. With the advent of new technologies and the proliferation in the market of distributed generation and energy storage ... the security of the [national electricity market] is now less certain than when it was designed.
"We need to go back to the basics and establish an agenda which not only encourages competition but also efficient investment in the market."
He was speaking following the release of the fourth report by AEMO into the state-wide electricity blackout in South Australia last September after a mini-tornado brought parts of the transmission network down, which took several weeks to repair.
The report reiterated the findings of earlier reports that the protective settings of some of the state's wind farms caused them to stop generating, which then caused a surge in imports from Victoria until it could no longer cope with demand, which was the trigger for blackouts.
Supplies were restored to 90 per cent of the the state's electricity users by around midnight following the outage, but it took some weeks before supplies were fully restored.
Complex problems
The prolonged supply disruption prompted the South Australian government to draw up its own response, which includes installing additional power generators in a bid to ensure further outages do not occur.
"Blackouts are symptoms of underlying complex problems," Mr Marxsen said.
"This summer has seen three instances of automatic load shedding and three instances of directed load shedding in four different NEM regions. We had a near-miss of a second black system event in South Australia and multiple near-misses of directed load-shedding.
"Voluntary reduction of demand by customers over peak periods was an important factor in cutting blackout risk in two of these events."
Mr Marxsen said some of the operations of the electricity market "require fundamental change to help us to better manage emergencies in which multiple factors are rapidly changing".
More to come