Issue date
AER reference
NR 14/19

The Australian Energy Regulator (AER) has commenced proceedings in the Federal Court against four wind farm operators for alleged breaches of the National Electricity Rules (NER).

Proceedings have been brought against subsidiaries of AGL Energy Limited (ASX: AGL), Neoen SA, Pacific Hydro Pty Ltd and Tilt Renewables Limited (ASX: TLT) in connection with wind farms they operated in South Australia.

The proceedings concern events on 28 September 2016 when severe weather conditions led to significant damage to South Australian transmission lines causing voltage disturbances. A subsequent loss of wind generation contributed to a State-wide black-out or black system event.

Approximately 850,000 customer connections in SA lost power on the day.

The AER alleges that each of these wind farm operators failed to ensure that their plant and associated facilities at the relevant wind farms complied with their generator performance standard requirement to ride-through certain disturbances.

In addition, the AER alleges that the wind farm operators failed to provide automatic protection systems to enable them to ride-through voltage disturbances to ensure continuity of supply, in contravention of the National Electricity Rules.

“The AER has brought these proceedings to send a strong signal to all energy businesses about the importance of compliance with performance standards to promote system security and reliability” AER Chair Paula Conboy said.

“These alleged failures contributed to the black system event, and meant that AEMO was not fully informed when responding to system wide failure in South Australia in September 2016.”

“Providing timely and accurate information to AEMO is critical in ensuring power system security and the effective operation of the wholesale energy markets,” Ms Conboy said.

The AER is seeking declarations, penalties, compliance program orders and costs.

The AER released an investigation report into the blackout in 2018 and these proceedings are the culmination of a series of detailed actions undertaken since the event.

Notes to editors

The AER has issued proceedings against subsidiaries of:

  • AGL Energy Limited in relation to the Hallett 1 (Hallett), Hallett 2 (Hallett Hill), Hallett 4 (North Brown Hill) and Hallett 5 (The Bluff) Wind Farms
  • Neoen SA in relation to the Hornsdale Wind Farm
  • Pacific Hydro Pty Ltd in relation to the Clements Gap Wind Farm
  • Tilt Renewables Limited in relation to the Snowtown 2 Wind Farm (comprising Snowtown Wind Farm Stage 2 North and Snowtown South Wind Farm).

The AER’s investigation into the BSE involved four components—pre-event period, system restoration and market suspension and the event. This announcement relates only to the event component.

In December 2018, the AER published a compliance report on the pre-event period, system restoration and market suspension components.

Generators are required to operate their plant in line with generator performance standards that they agree with AEMO. These describe how their systems will perform if adverse events occur. This data is critical to AEMO in operating the power system safely and reliably.

The provision of timely and accurate information to AEMO is an enforcement and compliance priority for the AER.

About the AER

The AER works to make all Australian energy consumers better off, now and in the future.

We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.

We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.

We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We do not set the prices consumers pay.

We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.