1. The problem for most consumers is that the reliability standard has nothing to do with their actual experience. If we doubled the Reliability standard to 0.001% or weakened it by a factor of 10 to 0.02%, the lost time per customer would hardly vary because generation shortages would fall from 0.3% of outages to 0.15% an average of 8 seconds less or increase from 0.3% to 3% or 2.5 minutes more lost time per year. Who would notice either of these changes.
2. We do have very course methods of improving reliability for critical customers:
a) Large load centres are usually served by multiple feeders so if one generator or transmission line goes down, power can still be maintained
b) When load shedding is required areas including hospitals or critical infrastructure are usually last on the list.
c) Emergency generators or local batteries.
3. Now that generation and storage is being installed all along the supply chain from solar farms to houses, who is responsible for maintaining supply, the generator or the storage operator?
4. a) When Loy Yang A tripped after the power pylons collapsed and 90,000 customers were shed,
b) When wind farms were turned off because bushfire threatened their grid connections
Were these generator reliability events? I would argue that they were not, but others would argue they were.
In view of all the above, the focus on the reliability standard is a distraction from the real problems in the system which are mainly transmission and distribution weaknesses.
Thanks for the comment Peter. Definitely can't disagree with the impacts of outages on customers being much more strongly derived from the networks. It was a bit strange writing a whole article about reliability focussing on the bulk supply component which is practically such a small contributor to outages. That said, I don't think it means we shouldn't focus on the reliability standard - it still feeds into the wholesale costs on a bill. Tightening the reliability standard would possibly lead to very large cost increases for customers. On the flip side, reconsidering it in light of a more decentralised system could help reduce costs.
On those two events you listed - I think they'd both fall under security related outages, but the ambiguity does point to what feels like arbitrary distinctions. Particularly from the perspective of an end customer who loses power.
Thanks Declan. Good post and I agree with Peter's comments that system reliability is not as impactful to customers as network reliability is.
Network reliability is currently running around 99.95% (for my distributor) - 4 hours per annum. This compares to the reliability benchmark at 99.998% (I recognise that hours and energy are not the same measure, but network reliability is not measured that way.)
For network reliability we use the Value of Customer Reliability (VCR) to determine whether capital works are justified for improved reliability. The current VCR averages around $25/kWh and is updated by the AER on a regular basis through customer surveys.
The VCR is an average figure, but this discrepancy in reliability outcomes (network vs system) suggests that the reliability benchmark is set too high and that system reliability is far higher than customers are willing to pay for. (Although lower than what politicians may be willing to accept.)
Good explainer, Declan! I agree that how we manage reliability (the resource adequacy bit) should be reviewed, especially including the existing regime for managing demand when generation is short.
Note that I consider the existing regime as a form of demand flex because it is allowed for in the terms and conditions of customers' retail contracts. Those terms and conditions can be reviewed and changed.
We have the technology to allow customers to choose their place in the rationing queue, the lack of which is the only thing holding reliability back from being an individual, rather than a collective service (ie generic). It is just a matter of priority. I think the money we are spending on 'top of the cliff' funding to prevent reliability events is understandable but no one would guarantee this will prevent a fall and I don't like the look of the antiquated and neglected ambulance at the bottom of the cliff.
The 20th century system (priority feeder level disconnection) operated by AEMO and the DNSPs is far from the best we can do in the 21st century. It should be reviewed before we are forced to post event as one of the first questions will be - when was it last reviewed?
1. The problem for most consumers is that the reliability standard has nothing to do with their actual experience. If we doubled the Reliability standard to 0.001% or weakened it by a factor of 10 to 0.02%, the lost time per customer would hardly vary because generation shortages would fall from 0.3% of outages to 0.15% an average of 8 seconds less or increase from 0.3% to 3% or 2.5 minutes more lost time per year. Who would notice either of these changes.
2. We do have very course methods of improving reliability for critical customers:
a) Large load centres are usually served by multiple feeders so if one generator or transmission line goes down, power can still be maintained
b) When load shedding is required areas including hospitals or critical infrastructure are usually last on the list.
c) Emergency generators or local batteries.
3. Now that generation and storage is being installed all along the supply chain from solar farms to houses, who is responsible for maintaining supply, the generator or the storage operator?
4. a) When Loy Yang A tripped after the power pylons collapsed and 90,000 customers were shed,
b) When wind farms were turned off because bushfire threatened their grid connections
Were these generator reliability events? I would argue that they were not, but others would argue they were.
In view of all the above, the focus on the reliability standard is a distraction from the real problems in the system which are mainly transmission and distribution weaknesses.
Thanks for the comment Peter. Definitely can't disagree with the impacts of outages on customers being much more strongly derived from the networks. It was a bit strange writing a whole article about reliability focussing on the bulk supply component which is practically such a small contributor to outages. That said, I don't think it means we shouldn't focus on the reliability standard - it still feeds into the wholesale costs on a bill. Tightening the reliability standard would possibly lead to very large cost increases for customers. On the flip side, reconsidering it in light of a more decentralised system could help reduce costs.
On those two events you listed - I think they'd both fall under security related outages, but the ambiguity does point to what feels like arbitrary distinctions. Particularly from the perspective of an end customer who loses power.
Thanks Declan. Good post and I agree with Peter's comments that system reliability is not as impactful to customers as network reliability is.
Network reliability is currently running around 99.95% (for my distributor) - 4 hours per annum. This compares to the reliability benchmark at 99.998% (I recognise that hours and energy are not the same measure, but network reliability is not measured that way.)
For network reliability we use the Value of Customer Reliability (VCR) to determine whether capital works are justified for improved reliability. The current VCR averages around $25/kWh and is updated by the AER on a regular basis through customer surveys.
The VCR is an average figure, but this discrepancy in reliability outcomes (network vs system) suggests that the reliability benchmark is set too high and that system reliability is far higher than customers are willing to pay for. (Although lower than what politicians may be willing to accept.)
Good explainer, Declan! I agree that how we manage reliability (the resource adequacy bit) should be reviewed, especially including the existing regime for managing demand when generation is short.
Note that I consider the existing regime as a form of demand flex because it is allowed for in the terms and conditions of customers' retail contracts. Those terms and conditions can be reviewed and changed.
We have the technology to allow customers to choose their place in the rationing queue, the lack of which is the only thing holding reliability back from being an individual, rather than a collective service (ie generic). It is just a matter of priority. I think the money we are spending on 'top of the cliff' funding to prevent reliability events is understandable but no one would guarantee this will prevent a fall and I don't like the look of the antiquated and neglected ambulance at the bottom of the cliff.
The 20th century system (priority feeder level disconnection) operated by AEMO and the DNSPs is far from the best we can do in the 21st century. It should be reviewed before we are forced to post event as one of the first questions will be - when was it last reviewed?