NEM Flashcards
What is AEMO’s primary objective?
AEMO’s primary objective is to maintain system security and supply reliability. Security refers to the system continuing to operate within defined limits (relating to frequency, inertia, system strength) and reliability refers to ensuring supply can meet demand.
Pros and cons of inertia in the system
Different forms of generation produce lower and higher inertia, which is a big issue. Inertia can be considered as resistance to change. Generally higher inertia is useful for resisting changes in frequency, creating more time for frequency control services to respond.
Why does frequency matter, what frequency is ideal, how does AEMO manage frequency?
Frequency of Australia’s power grid primarily runs at 50HZ. It’s important to maintain frequency for grid stability. Imbalances in supply and demand can disrupt frequency. Frequency Ancillary Services can help to mitigate this, such as working with generators to input reserve electricity into the grid when there is an imbalance of supply.
Summarise how AEMO structures the electricity market
- Market generators produce electricity, which goes into a ‘pool’. Retailers buy electricity from the pool and sells it to consumers. Some market customers buy straight from the pool. Scheduled generators are those that have high control over generation output such as coal, gas, hydro. Semi scheduled generators have some control but greater variability such as solar and wind.
○ Generators and retailers can get fixed prices through making contracts, where they agree to pay the marginal difference between the fixed price and the spot price.
How is the spot price determined.
The spot price is determined by highest of the lowest bid for a particular time interval. This is because every generator is paid the same price for generation for a particular time interval.
Electrical units: What is a volt, amp, watt, KW, MW, GW, joule?
Volts is likened to pressure in a water pipe. Amps is measure of the rate of electrical current or its speed. Watts is electrical power measurement you get by multiplying amps and volts. A KW is 1000 Watts. A MW is a million Watts. A GW is a billion Watts, or a thousand MW. A joule is a unit of energy, gas is measured in joules.
What is metering?
Metering is important to measure the generation, transportation and consumption of electricity. Each connection point to the grid has a NMI (National Metering Identifier). You can request your metering data from your retailer.
What are Prudential’s?
Prudential’s refers to the rules and regulations in Australia’s grid, developed by the Australian Energy Market Commission
What are settlements?
Settlements refers to the reconciling of payment to generators based on electricity consumed.
What is load?
Load refers to the amount of electricity that is being consumed at a particular time.
What’s the history of electricity industry in Aus?
○ Pre 1990: electricity generation and distribution led by states
○ 1990: Industry Commission Inquiry initiates a national electricity industry reform process to increase competition, promote greater choice for consumers, provide info to market participants regarding timing for investing in generation and network developments
○ 1996: National Electricity Law adopted by five jurisdictions.
○ 1998: Commencement of the NEM.
○ 2005: establishment of Australian Energy Commission and AER
○ 2009: AEMO commenced operation
○ 2019: Electricity reform continues.
Electricity industry has been story towards centralisation of generation, distribution and markets. Now we will shift towards a centralisation of markets and distribution, while decentralising generation.
What are the three markets involved with the NEM and what do they do?
- Three markets underpinning the NEM include the National Electricity Market, the Retail Market and the Financial Market.
○ NEM is a wholesale market involving retailers purchasing electricity from generators.
○ Retail market involves selling electricity to homes and businesses - Financial market describes contracts set up between electricity producers, retailers and investors. They may lock in a firm price that will be produced or consumed at a given period of time. This gives insurance to each player that they will make money and safeguard their investment.
What is COAG?
The Council of Australian Governments is the peak intergovernmental forum in Australia.
There is the COAG Energy Council working in energy markets and policy development.
How is electricity generated?
Heat water to produce steam. Steam turns a rotor surrounded by large magnet and coils of copper wire. The turning of the magnet and copper create a stream of electrons.
Summarise your knowledge on atoms.
Everything we see is made up of atoms. Atoms are made up of protons, neutrons, electrons and a nucleus. The number of protons in an atom determines what element it is. There are 118 known elements. Atoms can join together. Atoms do this to keep the number of negatively charged electrons more stable. When they are the same element, it’s called a molecule. When it’s of different bonded elements, it’s called a compound. e.g. water is a compound cause it’s made up of hydrogen and two oxygen. Creating a bond releases energy. Breaking a bond requires energy (breaking the elements that make up water).
