The peak body for generators and retailers, the Australian Energy Council has expressed disappointment at the Australian Energy Market Commission's (AEMC) draft decision on its proposal for an inertia market.
The AEC's General Manager Wholesale and Environment David Feeney said he believed an inertia market offered a prudent and very cost-effective form of insurance or risk management for the National Electricity Market to ensure system security.
"Inertia has traditionally been provided by dispatchable plant like coal-fired generators. The provision of essential system security (ESS) services in the future is vitally important as the energy system transitions and thermal generation exits.
"There are different ways this can be achieved. What we proposed was a level playing field to provide more options given an inertia market could deliver a range of technology solutions at least cost and efficiently deal with technical uncertainty.
"The AEC believes ESS will be provided both via network assets like synchronous condensers, and non-network assets like grid forming batteries. ESS can also be provided by repurposing current thermal generators to act as synchronous condensers after they retire.
"For that reason, we still think the idea of a market has merit, but we are also open to other mechanisms which can foster innovation in the provision of ESS, provide investment signals to non-network assets, and support a least cost and timely energy transition."
About the Australian Energy Council
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.
