The Australian Energy Regulator (AER) has made a determination on Basslink’s application for review of a draft system security network support (SSNS) contract with Hydro Tasmania.
The AER has determined that the payment terms in the proposed contract are prudent and efficient. The proposed contract is for Hydro Tasmania’s continued provision of the load shedding and generation tripping services required under the existing Tasmania Frequency Control System Protection Scheme (FCSPS). Basslink is required to have these FCSPS services in place by 1 July 2026 to enable the interconnector to continue to operate at its full transfer capability.
Following the AEMC’s Improving Security Frameworks for the Energy Transition rule change (the ISF Rule), regulated transmission network service providers (TNSPs) can now, before signing a contract, seek AER review of the proposed payment terms in a draft contract between the TNSP and SSNS provider (such as a generator, battery or large energy user).
The AER’s role is to determine whether expenditure based on the payment terms will likely be prudent and efficient. We assessed the application for consistency against the operating expenditure objectives and criteria in the National Electricity Rules (NER), in accordance with our SSNS payment guideline. The AER will publish its full decision document with reasons as soon as practicable.
Background
System security services include system strength, inertia, and network support and control ancillary (NSCAS) services typically provided by a synchronous generator, battery or large energy users to ensure the power system is secure as it transitions to accommodate more renewable generation.
The ISF Rule allows (but does not require) TNSPs to seek a determination from the AER that expenditure for payments or payment methodologies in a draft SSNS contract will likely be prudent and efficient, i.e. consistent with the operating expenditure objectives, criteria and factors, and relevant network support pass through factors in the NER.
The NER criteria and our general approach to reviewing draft system security contracts is outlined in the AER’s SSNS payment guideline.