Market-Based Ancillary Services in the Australian National Electricity Market for Increased Levels of Wind Integration

Abstract

This paper provides an overview of Australia's National Electricity Market (NEM) with a focus on its design and implementation features that benefit an increasing level of wind generation. The NEM design is discussed both in terms the ability of the system operator to manage threats to the security of the power system that an increasing level of wind integration may pose through the use of market-based frequency control ancillary services (FCAS) as well as the extent to which the commercial decision-making processes are suitable for participation of wind farm operators in the electricity market. In this way, the features of the NEM that facilitate wind integration are identified along with aspects of the market design that could be refined. This allows for comparisons to be made to other electricity market designs in terms of their ability to support an increasing level of wind integration.