AEMO WELCOMES NEW CEO AUDREY ZIBELMAN P3 FUTURE POWER SYSTEM SECURITY PROGRAM CONTINUES TO DELIVER P4 THE PEOPLE BEHIND AEMO P8 Energy Update February 2017
UPDATE FROM ACTING CHIEF EXECUTIVE OFFICER KAREN OLESNICKY Welcome to the first Energy Update of 2017. I hope you have all hit the ground running after a wellearned Christmas break, and are already tackling the challenges of another exciting year in the energy industry. This will be my final Energy Update as acting CEO, as on 20 March 2017 we will welcome Audrey Zibelman as AEMO’s new CEO, who joins us to continue her extremely distinguished career. Audrey comes to AEMO with extensive international experience in the public, private and not-for-profit energy sectors. Most recently she held the position of Chair of the New York Public Service Commission (NYPSC), where she oversaw the regulation and safety of New York’s electricity, gas, telephone, cable, water and steam utilities. It has been a privilege to serve as acting CEO of this great organisation, despite it being the result of the sad and sudden passing of our dear colleague and friend, Matt Zema. It has been an honour to have had the opportunity to carry on his legacy for the energy industry and I would like to thank everyone who has supported this role, especially my colleagues at AEMO.
This support was especially appreciated during the recent challenges we faced, not only last year with the South Australian Black System event occurring on 28 September, but also this year, when we were challenged to maintain the security of a power system in transition during a recent heatwave in early February. The hot temperatures that hit eastern and south eastern Australia in February, resulted in supply issues to both South Australia (where 100 MW of load shedding was directed by AEMO) and New South Wales (where load shedding to a large industrial customer was required to maintain supply to domestic customers) has brought considerable focus to the structure and operation of the National Energy Market. During the same week as these power system events, AEMO appeared at the Senate Select Committee into the Resilience of Electricity Infrastructure in a Warming World to discuss our roles and responsibilities in maintaining power system security under the existing National Electricity Law. The heatwave event highlighted our position on this topic, and the need to evolve the National Electricity Market (NEM) design to meet current and future requirements. AEMO has openly called for greater unity to address the growing challenges of today’s power system. Our stakeholders remain fundamentally critical to this evolution.
Looking ahead, our focus shifts to gas in March with the delivery of the Victorian Gas Planning Report (VGPR) and the Gas Statement of Opportunities (GSOO). The VGPR (the first full bi-yearly report since changes to the National Gas Rules) informs market participants and government of transmission capacity changes in the gas market that impact security and reliability in the Victorian Declared Transmission System. The GSOO provides information over a 20-year outlook period on the adequacy of eastern and south-eastern Australian gas markets to supply maximum demand and annual consumption. This is one of our major reports and the 2017 report will again provide some extremely important planning indicators with a strong focus on the interdependencies between the electricity and gas sectors. Thank you once again for all your support and I look forward to yet another exciting year in Australia’s energy industry. All the best,
We look forward to being a part of, and driving discussions around the challenges of maintaining power system security, on topics such as the evolving generation mix and demand profile changes, government policies, contestable metering and extreme weather events.
Update from Acting Chief Executive Officer Karen Olesnicky
The heat is on for a united approach to power system security
AEMO welcomes new CEO, Audrey Zibelman
Future power system security program continues to deliver
AEMO welcomes nine engineering and economic graduates to help shape Australia’s energy future
AEMO’s Dr Jenny Riesz tours Ireland’s transmission grid operator, EirGrid
The people behind AEMO… Introducing Neetika Kapani, Team Leader, System Capacity (WA)
Energy Update February 2017
AEMO WELCOMES AU D R E Y Z I B E L M A N The Australian Energy Market Operator (AEMO) is excited at the appointment of Audrey Zibelman to the position of Chief Executive Officer. Ms Zibelman was selected for the role after an exhaustive international search and brings with her a wealth of experience in public, private and not-for-profit energy and electricity sectors in the United States spanning more than three decades. Most recently she held the position of Chair of the New York State Public Service Commission (NYPSC), where she was responsible for overseeing the regulation and safety of New York’s electric, gas, telephone, cable, water and steam utilities. AEMO Chair Dr Anthony (Tony) Marxsen said the AEMO Board was thrilled to have someone who would build on the strong legacy left by Matt Zema, “to deliver on AEMO’s vision of energy security for all Australians”. “Audrey’s vast experience in creating and managing new wholesale electricity markets, and transforming existing energy markets and large power systems will further strengthen the work that AEMO has undertaken to support Australia’s energy industry transformation,” Dr Marxsen said. “Audrey has the vision to lead, guide and support our organisation and the broader Australian energy industry as we transition our energy markets and reform power systems planning and management.” During her tenure at the NYPSC, Ms Zibelman led the design and implementation of extensive regulatory and retail market changes to modernise and transform the state’s electricity industry under New York Governor Andrew Cuomo’s ‘Reforming the Energy Vision’ plan. The REV plan has been internationally recognised for successfully developing and implementing 21st century regulatory reform with a focus on lowering the cost of energy for consumers while building a more resilient and reliable power system.
A recognised international expert in energy policy, markets and Smart Grid innovation, Ms Zibelman is the founder and past President and CEO of Viridity Energy, Inc. and past Executive Vice President and Chief Operating Officer of GO15 member organisation, Pennsylvania-New JerseyMaryland Interconnection (PJM), a regional transmission organisation responsible for operating the power grid and wholesale power market which serves 14 states across the eastern United States. Until the early 2000s and the development of the European Integrated Energy Market, PJM was considered the world’s largest competitive wholesale electricity market serving 61 million customers with a generating capacity of 183.6 gigawatts. Ms Zibelman holds an Executive MBA from the Carlson School of Management and a Bachelor of Arts from Pennsylvania State University, and a JD/LLD-Doctor of Jurisprudence (Law) degree from Hamline University School of Law.
“When you see Audrey’s list of experience it is easy to understand why the Board was so impressed and why we are excited to have her at the helm of AEMO during the exciting transformational times ahead for the Australian and global energy industry,” Dr Marxsen said. Dr Marxsen also thanked Karen Olesnicky for taking on the Acting CEO role following Matt Zema’s passing. “Karen has done an outstanding job during what has been a trying and challenging time for both AEMO and the broader energy industry. The Board thanks Karen for her leadership, dedication and commitment to our organisation.” Ms Zibelman commences as AEMO CEO, and will be located in the Melbourne office, as of Monday, 20 March.
Energy Update February 2017
F U T U R E P OW E R S YS T E M S E C U R I T Y PROGRAM CONTINUES TO DELIVER In January, AEMO released two technical reports – the Visibility of Distributed Energy Resources (VDER) and the Future Power System Security progress report (FPSS) – both focusing on power system security in the National Electricity Market (NEM). These reports are produced as part of the Future Power System Security Program, which provides analysis on the security of the power system in the face of a changing generation mix and demand patterns. “Even though technology is constantly changing and presenting new challenges to the power system in terms of power system security and reliability of supply, AEMO’s responsibilities to maintain a secure and reliable power system don’t change, which is why these reports are so important,” Alison Demaria, AEMO’s Manager Future Grid Development, said. The VDER report is an analysis of how the increase in “behind the meter” distributed energy production or load shifting — currently invisible to the market operator and thus unpredictable in terms of load forecasting and load response — could have a detrimental impact on power system security. “There has been a large increase in behind the meter energy production due in part to the installation of private rooftop photovoltaic (PV). We expect with energy battery storage becoming more cost efficient, there will be even greater incentive for consumers to invest in distributed energy,” Ms Demaria said. “This could result in an ever increasing amount of Distributed Energy Resources (DER) information we cannot see, which will make it increasingly difficult to produce accurate regional forecasting, predict load and predict how the system will perform during system disturbances.” Information provided by AEMO to the market is key to delivering an efficient market which achieves the National Electricity Objectives. It helps participants make a range of operating and investment
Energy Update February 2017
decisions across timeframes ranging from pre-dispatch out to 10-20 year planning horizons.
require it on an as-needs basis while taking into account confidentiality issues,” Ms Demaria said.
“But if we can’t see what is happening with DER because it exists behind the meter, there is a real risk the power system will increasingly operate inefficiently, with assets under-utilised, less informed investment decisions being made and increased costs being borne by customers,” Ms Demaria said.
Visibility of DER featured as part of the FPSS progress report which summarises work that has been progressed on frequency control, management of extreme power system conditions and system strength to further understand challenges within these areas since the last report of August 2016.
The VDER report suggests the need for the establishment of a national data collection framework to address the data gap associated with the emergence of DER and mitigate potential negative impacts on power system security.
“The report is a consolidated update of AEMO’s FPSS work program, which has the aim of ensuring power system security is maintained in the NEM in the face of the changing generation mix and demand patterns,” Ms Demaria said.
“A framework should be established to ensure relevant data is collected and made available to AEMO and network operators. The framework should be technology neutral, transparent and flexible, and take into account which party is best placed to collect the required information and available to those who
The FPSS engages with stakeholders through a submissions process as well as program roadshows, AEMO hosted forums and industry events.
AEMO’S DR JENNY RIESZ TOURS IRELAND’S TRANSMISSION GRID O P E R AT O R , E I R G R I D In January, AEMO’s Dr Jenny Riesz travelled to Ireland’s transmission grid operator, EirGrid, in order to learn about their DS3 program. The trip aimed to strengthen a relationship between AEMO and EirGrid, and provided AEMO with an inside view on some of the world renowned projects currently being completed in Ireland. Many of these projects could be applied in a similar way in Australia, to ultimately further secure our country’s energy future.
Similar to AEMO’s Future Power System Security (FPSS) program, EirGrid’s DS3 program is completing world-leading work on managing high Rates of Change of Frequency (RoCoF), and developing new ancillary services such as Synchronous Inertial Response (SIR) and Fast Frequency Response (FFR). “It’s so important for AEMO to connect with organisations like EirGrid”, Dr. Riesz said. “We are both tackling similar issues at the international forefront of challenges that arise with growing levels of nonsynchronous generation such as wind and photovoltaics. We can learn so much from their ground-breaking work, and vice versa”. The knowledge sharing revealed many important insights for AEMO, particularly around EirGrid’s testing program for RoCoF withstand capabilities of synchronous generators. EirGrid has completed extensive work in this area over the past three years, and was able to share valuable insights with AEMO around the technical learnings.
AEMO and EirGrid are looking forward to continuing their collaboration and knowledge on these topics in order to help secure the energy future of both nations. To learn more about Dr Riesz’s experience, contact email@example.com
It’s so important for AEMO to connect with organisations like EirGrid. We are both tackling similar issues at the international forefront. We can learn so much from their ground-breaking work, and vice versa.”
EirGrid also shared insights on their work to develop and implement a suite of new system services, including SIR and FFR. AEMO is collaborating with the Australian Energy Market Commission (AEMC) on the potential design of services of this type in the National Electricity Market, and the detailed insights from EirGrid can contribute to that design process. Energy Update February 2017
T H E H E AT I S O N FOR A UNITED APPROACH TO POWER SYSTEM SECURITY
The heatwave that struck eastern and south eastern Australia in early February, and the resultant load shedding events in South Australia and New South Wales, has highlighted energy security as a high priority in an energy market in transition to a low emissions future.
High temperatures impacted South Australia on 8 February, placing strain on the power system and ultimately requiring AEMO to direct 100 megawatts (MW) of controlled load shedding to maintain power system security in the state. The heatwave then continued across the eastern states of Australia over the coming days, creating a tightening of supply in both NSW and Queensland. On 10 February, with no further generation available to serve the demand in NSW and relieve the overloading interconnectors, as a last resort at 1658 hrs, AEMO instructed TransGrid to reduce demand at the Tomago aluminium smelter (290 MW) to restore the power system in New South Wales to a secure operating state. “The complexities and challenges of managing short-notice generation capacity reductions amid high temperatures and increasing electricity consumption are evident,” AEMO Executive General Manager Stakeholders and Information, Mr Joe Adamo said. “AEMO believes that to maintain a secure supply of energy we need holistic planning across the whole energy supply chain so that investment and policy decisions are made in the long term interests of consumers. “This transition to a reliable, affordable and sustainable framework is everyone’s responsibility. The challenges faced recently showed that we all need to adapt and evolve to manage the complexities of today’s market,” continued Mr Adamo.
Energy Update February 2017
The investigations found a range of circumstances contributed to the need to load shed, which was the only option available in both SA and NSW to restore power system security and prevent the risk of damage to crucial infrastructure which could have had much more potentially disastrous, and longer term impact on consumers. In its planning documents in recent years, AEMO has consistently stated that the National Electricity Market (NEM) is in transition. In 2015, AEMO began a collaborative work program with the Australian Energy Market Commission (AEMC) to work together to identify appropriate solutions for Australians. AEMO cannot do this alone, and broad engagement is needed for future success. AEMO will continue to work with governments, both Federal and State, industry institutions and the community to positively progress key energy trends. AEMO will continue to objectively and independently provide information via its suite of energy planning and forecasting publications. For more information, please contact firstname.lastname@example.org
A E M O W E LC O M E S NINE ENGINEERING AND ECONOMIC G R A D UAT E S T O H E L P S H A P E A U S T R A L I A’ S ENERGY FUTURE This month, AEMO is proud to welcome nine outstanding graduates from across the nation, to join AEMO for its 2017 Graduate Development Program. Applications for AEMO’s highly regarded Graduate Development Program, now in its sixth year, have almost doubled in the past 12 months, with a record 980 applications received from Australia’s best and brightest graduate students seeking to contribute towards shaping Australia’s energy future. The three–year Graduate Development Program, which allows graduates to complete four, nine–month rotations in a myriad of teams across the business, has also gained national recognition this year, after securing a number 70 rank on the Australian Financial Review’s Top 100 Graduate Employers 2017. “We are very proud that AEMO’s three– year rotation program is not only one of the leading graduate programs in our industry, but a leading graduate program in Australia,” said Executive General Manager, People and Culture, Jo Witters. “AEMO has worked hard over the past six years to provide our graduates with a challenging, rewarding and supportive program that exposes them to the wide range of opportunities and complexities that are currently being faced in the energy industry today. The Graduate Development Program ensures that our graduates are able to drive their own professional development within AEMO, and increase their scope within the broader industry.” As AEMO is responsible for operating Australia’s power systems and gas and electricity markets, including the National Electricity Market the Wholesale Electricity Market, and the wholesale gas Short Term Trading Market hubs in Adelaide,
Sydney and Brisbane, the nine new graduates will be given the opportunity to develop their skills and knowledge in order to contribute towards solving some of the issues being faced by the rapidly developing energy industry. “With the gas and electricity industry currently undergoing a dramatic transformation due to the introduction of new technologies and carbon emissions targets, the nine new graduates will be in high demand across the business, as they begin to utilise their skills to help transform Australia’s energy landscape,” said Ms Witters. “The success of our graduate program to date is a huge part of our dedication and our enthusiasm to remaining an employer of choice for the best and brightest minds working in Australian energy.” For more information on AEMO’s graduate program, visit the AEMO website or Grad Australia.
With the gas and electricity industry currently undergoing a dramatic transformation…the nine new graduates will be in high demand across the business, as they begin to utilise their skills to help transform Australia’s energy landscape,” Jo Witters, Executive General Manager, People and Culture.
Energy Update February 2017
THE PEOPLE BEHIND AEMO… INTRODUCING N E E T I K A K A PA N I , TEAM LEADER, S Y S T E M C A PA C I T Y ( WA ) In this column we take you behind the scenes at AEMO, introducing you to some of our employees. In this edition we talk to Neetika Kapani, Team Leader, System Capacity (WA).
Energy Update (EU): Tell us about how you got to AEMO? Neetika Kapani (NK): After earning my second Masters degree in Applied Statistics with a Cognate in Operations Research from Bowling Green State University (BGSU), Ohio, I taught undergraduate Statistics for four years at BGSU prior to moving to Perth. I worked as a Forecasting Analyst at Synergy for a year, but the desire to have a more overarching view of the energy market prompted me to apply to the Independent Market Operator, now AEMO. EU: What is your role at AEMO? NK: I have the pleasure of managing the System Capacity team in Western Australia (WA). It is a highly motivated team of six who carry out the processes involved in successfully operating the Reserve Capacity Mechanism (RCM) market, a unique feature in the Wholesale Electricity Market (WEM). I also ensure the successful development of the annual WA Gas and Electricity Statement of Opportunities reports. These reports are used by industry stakeholders to get an overview of WA’s electricity and gas markets, including supply and demand forecasting, current issues and an overview of key market participants and energy assets within WA over a 10-year outlook period. This means I engage with stakeholders in both formal and informal forums. EU: How long have you been in the role? NK: Since joining AEMO five years ago, I have moved up from being an analyst to senior analyst and now, team lead for the past two years. As a senior analyst, I was actively involved in supporting the RCM
Energy Update February 2017
operations by analysing and reviewing electricity demand forecasts. I also monitored the performance of capacity providers, advised stakeholders on RCM related topics and mentored new starters. EU: What drew you to working in the energy industry? NK: Working as a forecasting analyst at Synergy led to my broader interest in the electricity market. But what I enjoy most is the fast-paced environment. The energy industry is one of the largest industries in the world and an enabler of many industries. The dynamics of a traditional power grid being managed by various parties – opening up competition to private generators, separating the state grid to a standalone network operator and creating a wholesale electricity market for retailers – are interesting and challenging. EU: What do you love most about working for AEMO? NK: The bright and talented people I get to interact with, and the variety in the work that I do! It is also satisfying that in my job I can help provide secure and reliable energy to all Australians. Given AEMO is a large organisation, operating multiple energy markets and energy systems, there is a lot of opportunity for me to expand my skills. EU: How do you see the future of the industry evolving? NK: Obviously, there will need to be further integration of renewables, energy storage such as batteries and potentially EV’s, into the grid in a secure and reliable manner. The impact of rooftop solar PV on peak demand will also be an issue. All these things will be a major challenge for the industry, especially while maintaining and replacing our aging infrastructure.
NEW FEE STRUCTURE FOR AEMO’S GAS AND ELECTRICITY COURSES AEMO is offering a new fee structure for its gas and electricity courses in 2017. This is in response to increased interest from industry, government, community and regulatory bodies in understanding the complexities of existing and emerging energy systems and markets in Australia.
The National Electricity Market (NEM) eLearning package is now free for all participants (previously $220 per pax), and the face-to-face NEM Overview course is now $660 per pax, (reduced from $880.)
for the first half of the year are available on the AEMO website, and include:
AEMO’s new Declared Wholesale Gas Market (DWGM) and Short Term Trading Market (STTM) courses now include e-learning training, together with the faceto-face training. Other new course options include training in Western Australia’s electricity and gas markets.
Two DWGM Overview courses
All training courses are open to existing and intending market participants, government and energy industry bodies, and are available at selected AEMO offices. The course calendar, dates and venues
TRAINING C A L E N DA R F O R 2 017 I S H E R E !
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For all the details on upcoming training courses for 2017, you can visit AEMO’s website here.
Six separate NEM and Wholesale Electricity Market (WEM) Overview courses One STTM Overview course One Metrology for the NEM course One Network and Frequency Control Ancillary Services (FCAS) Constraints in the NEM course One Understanding Market Settlement and Transfer Solution (MSATS) course. Please direct all expressions of interest to email@example.com
to register, you can visit AEMO’s Learning Centre or call the Information and Support Hub on 1300 236 600.
For information on all courses, and on how
T E L L U S W H AT Y O U T H I N K AEMO welcomes your feedback. If you have suggestions, comments, or wish to change your contact details, please email firstname.lastname@example.org. Energy Update February 2017