RE: Efficient Provision of Inertia – Consultation Paper - 1. Overview

The AEMC’s primary concern should be the development of a mechanism that i) increases the speed and ii) reduces the complexity of decarbonising and electrifying the NEM, and does not increase NEM emissions. [...] In evaluating any prospective mechanism, the AEMC should consider: • The complexity of the change – whether it will make investment easier or more challenging, in both new energy sources (e.g., VRE) as well as the provision of inertia • Whether a prospective rule is likely to extend the life (and therefore emissions) of coal generators, which will have a material long-term cost to consumers • Whet. [...] However, depending on the H constant and total quantity of inertia required, the headroom may need to be distributed around more nameplate capacity (to ensure the required response is delivered, as described in the analysis above) o It will therefore be important to establish market signals that ensure that headroom is optimally distributed across resources and can be used to deliver both inertial. [...] Procurement options General comments • The AEMC should consider whether the fundamental service to be procured is an “inertia” service or a “RoCoF” service – that is, whether the fundamental need in the system is some form of inertia or whether the fundamental need is to limit RoCoF. [...] • To the extent that TNSPs contract eligible resources to deliver system strength, inertia procurement should be considered at the same time, but TNSPs should be seeking to contract not build the relevant resources to avoid conflicts.