icon-inquiry Inquiry into licensing arrangements under the Electricity Act 1996 for inverter-connected generators

  • Project Released: 2 Dec 2016
  • Project Closes: Sep 2017
  • Contact: Con Carellas


In June 2016, the Essential Services Commission commenced an Inquiry into technical licence conditions for inverter-connected electricity generators. This is the third review that the Commission has conducted into this matter, following earlier reviews in 2005 and 2010.

The Inquiry is considering the licence conditions which the Commission should apply to grid-scale, inverter connected wind-powered generators. Since the 2005 review, the Commission has placed additional conditions on such generators, requiring them to meet higher performance standards under the National Electricity Rules. A key focus for the Inquiry is whether or not those existing conditions should be maintained, enhanced or otherwise altered – and includes a consideration of their application to other inverter-connected electricity generators or other parties.


Current status is Further info

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Further information

Electricity generation licence conditions Inquiry – interim AEMO advice

The Commission is conducting an Inquiry into the additional technical licence conditions that it has applied to wind and other inverter-connected generation plant in South Australia since 2004. The Inquiry is looking to determine whether or not the conditions continue to be required and, if so, what form they should take given the power system, technological and market changes which have occurred since the conditions were last reviewed by the Commission in 2010.
The licence conditions apply in the absence of national rules which effectively integrate new generation technologies and are intended as a transitional arrangement until such time as national or other rules come into effect.
The Australian Energy Market Operator (AEMO) is providing technical advice to the Commission as a part of the Inquiry. AEMO’s draft advice is expected to be published in April; however, to provide direction to stakeholders, AEMO has prepared interim advice on generator licence conditions for new generationPDF-Icon
AEMO’s interim advice is that the high proportion of non-synchronous intermittent generation in South Australia justifies having additional or tighter technical standards than those that currently apply under the National Electricity Rules. AEMO therefore recommends that, effective immediately, all new generation licences be subject to additional conditions, in order to give regard to the technical changes affecting the South Australian power system. 
In addition to the Commission’s existing set of licence conditions for new generators, AEMO is currently considering several additional and enhanced licence conditions including:

  1. Frequency control capabilities, including:
    1. Mandatory provision of frequency control capability for new generators connecting in South Australia (regulation and contingency services) throughout the operational frequency tolerance band and the extreme frequency excursion tolerance limit; and
    2. the ability to receive and respond to automatic generation control (AGC) based on four second signals.
  2. Ramp rate controls, including:
    1. The capability to limit the rate of change of active power within each dispatch interval.
  3. Voltage and frequency disturbance ride-through capabilities, including:
    1. a requirement to meet both the National Electricity Market (NEM) automatic standard (a high rate of change of frequency for a short period) and minimum standard (a lower rate of change of frequency for a longer period) with regard to the rate of change of frequency the generator must be able to withstand
    2. obligations for generators to ride through a specified total duration of voltage disturbances, eg one to two seconds, within specified periods, eg five minutes, regardless of each individual disturbance type or duration;
    3. the ability to recover active power output after the fault clearance as fast as possible without compromising voltage recovery
    4. a requirement to supply or absorb fast acting reactive power during, and after the disturbance (if necessary), depending on whether the disturbance causes low voltages or high voltages; and
    5. a requirement for enhanced high voltage ride-through capability beyond that specified in NER Figure S5.1a.1 to mitigate the risk of system collapse following loss of synchronous connection between South Australia and the rest of the NEM.
  4. Other capabilities, including:
    1. The ability to assist in system restoration following a black system event.

The Commission has considered the interim advice and will require these additional technical conditions for any new generation licence application (for any form of generation) until such time as AEMO’s final advice is received and the Inquiry is completed.  
Potential new generation licence applicants are asked to contact the Commission to discuss licensing requirements and processes.


On 2 December 2016, the Commission released an Issues Paper as part of its Inquiry into the licensing arrangements for inverter-connected generators. The Commission also invited stakeholders to contribute their views on the matters raised in the Issues Paper as well as the Australian Energy Market Operator’s (AEMO) preliminary advice to the Commission.

Consultation on the Issues Paper closed on 30 January 2016. The Commission received 12 submissions and would like to thank stakeholders for their contributions.

All relevant issues raised in the submissions will be considered by the Commission ahead of releasing its Draft Report.

The Commission will undertake a further period of consultation upon the Draft Report’s release.


The Commission is the South Australian licensing authority for electricity generators which have an output of greater than 100kVA. That licensing function is separate and distinct from the National Electricity Market operational and regulatory roles of the Australian Energy Market Operator and the Australian Energy Regulator (respectively).

Currently 17 of the 40 generation licences issued by the Commission authorise the operation of wind-powered electricity generation plant. The total capacity of that plant, at 1596 megawatts, represents about one-third of the State’s total generation capacity.

Since 2005 the Commission has been imposing additional conditions in licences for grid-scale, inverter-connected wind-powered generation. Inverter-connected generators, such as wind and solar-powered generators, have different operational and technical characteristics and hence the conditions impose technical standards requiring those generators to meet higher performance standards under the National Electricity Rules.

The current additional conditions include the requirement to participate in National Electricity Market dispatch processes and to have additional plant and equipment installed to deal with matters such as the ability to ride through faults and the capability to manage reactive power.

The Commission introduced the conditions in 2005, and reviewed them in 2010, with the intent that they would only be needed for so long as national market rules did not cater for South Australian arrangements. 

The conditions are in place in the absence of a national framework dealing with the technical and system impacts of inverter-connected electricity generators. Were such a framework in place for existing inverter-connected electricity generators and other emerging generation and storage technologies, specific licence conditions in South Australia may well be unnecessary.

Since 2010, the underlying generation mix in South Australia has changed markedly and rapidly. There has been a shift from large-scale, ‘synchronous’, centrally-dispatched generation towards distributed and intermittent generation, connected to the power system through solid state inverter systems. These include wind-powered electricity generators, as well as a growing proportion of non-dispatched solar photovoltaic systems throughout the distribution grid. 

This has resulted in the power system becoming hybrid in nature (a mixture of synchronous and asynchronous technologies) – a matter not anticipated or catered for under existing national regulatory rules and arrangements. 

The Commission regards this matter as sufficiently important to warrant the conduct of a formal Inquiry into technical licensing requirements for electricity generators, to determine whether or not additional requirements continue to be required for South Australia and, if so, what form they should take and to whom they should apply. 


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