The Australian Energy Market Operator (AEMO) and industry are working together to implement important new functions that, from June, will better integrate grid-scale batteries into the National Electricity Market (NEM).
Today, grid-scale batteries account for approximately 1.4 gigawatts (GW) of storage capacity in the NEM, while AEMO’s Draft 2024 Integrated System Plan forecasts grid-scale battery capacity reaching 12.8 GW by 2050.
The Integrating Energy Storage Systems (IESS) project trials provide impacted industry stakeholders the chance to thoroughly test new functions to ensure they are prepared for June’s ‘go live’ dates.
As part of AEMO’s NEM Reform Program, the changes allow batteries to register, bid and dispatch as a single unit. Until now, participants with batteries that feed energy into the NEM as well as draw on energy, were required to duplicate each of these processes – one for generation and one for consumption.
By streamlining these processes, AEMO is making it easier for grid-scale batteries to participate in the NEM, whilst removing barriers for emerging battery systems in the future power system.
AEMO’s Executive General Manager of Reform Delivery, Violette Mouchaileh emphasised the scale and importance of the trial and changes to enhance battery participation in the NEM, making it more efficient and effective.
“Grid-scale batteries enable Australia to harness an abundant solar resource. If we can capture the solar energy created in the middle of the day to charge these batteries, they can then meet peak demand at night, helping to reduce our reliance on ageing thermal generation," said Ms Mouchaileh.
Furthermore, a range of industry participants are testing changes to AEMO’s cost recovery process for non-energy services such as system services and interventions. These changes better reflect the need for the services going forward and provide greater incentives for more efficient behaviour.
Stemming from a formal Australian Energy Market Commission (AEMC) rule change process, the IESS project is one of many future-critical projects in the NEM Reform Program that AEMO is collaborating with industry on.
“Ongoing collaboration with industry is critical as the NEM Reform Program continues to implement the necessary changes to meet Australia’s future energy needs,” Ms Mouchaileh said.
Since the NEM Reform Program commenced in 2022, AEMO has coordinated more than 200 engagement sessions with industry.
The industry market trials will run until Friday 24 May, before the new functions go live on Sunday 2 and Monday 3 June.
For more information about the NEM Reform Program, including the IESS, visit AEMO’s website.
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