Investigation into the power system events in Victoria - 16 January 2007

Infringement notice
Release date: 
26 November 2007
Related provisions: 

Clauses 3.9.2, 3.9.3, 4.2.3(f), 4.9.8(d), 4.15 of the National Electricity Rules.

Event date: 
16 January 2007


On 11 September 2007, the AER issued a final report on its investigation into the events of 16 January 2007, when bushfires in the north east of Victoria caused fully loaded 330kV transmission lines between Victoria and New South Wales to trip. The event also caused transmission lines between South Australia and Victoria to trip, resulting in the separation of the national power system into three electrical islands.

A major imbalance between supply and demand followed, which led to the activation of the Victorian automatic under-frequency load shedding scheme. Around 2200MW of load was shed. Load was fully restored within four hours.

The AER has made a series of recommendations as a result of this investigation. The AER also imposed a penalty of $60 000 on the State Electricity Commission of Victoria, trading as Vicpower Trading, when the AER issued three infringement notices over Vicpower Trading's failure to accurately reflect its capability in the National Electricity Market.

Vicpower Trading offers frequency control services into the National Electricity Market on behalf of an aluminium smelter at Point Henry, near Geelong in Victoria. The smelter's three potlines are separately registered by the National Electricity Market Management Company (NEMMCO) to provide frequency services.

The smelter shut down and was unavailable to provide frequency services for more than 30 minutes.

Vicpower Trading continued to offer frequency control services into the market even though it was unable to provide the services. The AER has reason to believe that the failure by Vicpower Trading to revise its bids following the shutdown of the three smelter loads amounts to a breach of clause 4.9.8(d) of the National Electricity Rules.


The AER made a number of recommendations related to:

Reclassification of non-credible contingency events

  • AER to propose Rule change to clause 4.2.3(f)

Load shedding

  • AER recommends formalising communication obligation in arrangements between NEMMCO, JSSCs and NSPs regarding load shedding
  • AER to undertake compliance auditing of SP AusNet’s protection and control systems

Load restoration

  • NEMMCO to report to the market by end 2007 on improved load restoration procedures and training AER to propose Rule change to clause 3.9.2

Setting dispatch price to VoLL

  • NEMMCO to provide an undertaking regarding compliance with clause 3.9.3

Intervention pricing

  • NEMMCO to provide an undertaking regarding compliance with clause 3.9.3

Compliance with technical performance standards

  • AER will recommend to the Victorian and Queensland governments that technical standards derogations be removed from the NER
  • AER to undertake auditing of technical performance compliance programs

Provision of FCAS

  • AER to follow–up with participant
  • AER to undertake auditing of generators’ FCAS performance

Infringement notices

  • The AER issued 3 infringement notices on SECV with infringement penalties totalling $60 000.