Reserves and Frequency Management (RFM) Programme

This programme of work was completed in November 2016

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Programme Overview

Programme Deliverables

Programme Overview

The SO and EA have been working together for some time to improve frequency keeping and instantaneous reserve market arrangements.

This work, along with the commissioning of the HVDC controls, enabling transfer of frequency keeping and reserve between islands, has culminated in a number of proposed capital projects that are to be managed as a programme of work known as the Reserves and Frequency Management (RFM) Programme

The overall objective of the RFM programme is: To develop frequency keeping and instantaneous reserve markets and associated arrangements, enabled by developments in HVDC control and other systems to improve electricity market competition and efficiency of procurement, for the net benefit of New Zealand electricity consumers.

Each project within the programme contributes to this objective.  Managing the projects as a programme recognises the major dependencies between them and allows business and system changes to be co-ordinated to optimise resourcing and development work.  This will generate value by improving industry outcomes, gaining greater engagement and smoother cross-organisation governance.

Programme Deliverables

The constituent projects and their status are described below:

Project Description
South Island MFK
(commissioned Aug 2014)

Implementation of multiple frequency keeping (MFK) in the South Island.   MFK allows multiple parties to compete to provide frequency keeping in each half-hour. Stronger competition is expected to reduce energy costs.

RMT TSAT Implementation
(commissioned Oct 2014)

Replacement of the existing calculation engine within the Reserve Management Tool (RMT).   The current RMT is at the end of its useful life and is difficult to maintain and manage especially with the changes necessary for the national reserves and frequency keeping projects.  The project moved RMT to a platform based on TSAT (Transient Security Assessment Tool) that is supported and can be more readily managed and modified for future market changes.

RMT Re-Development (withdrawn - not required)

Implementation of functional changes required by the national markets projects into RMT and associated support environments. 

RMT Study Tool (commissioned Jun 2016) Delivered a fit-for-purpose RMT Study tool replacement that interfaces with the new RMT TSAT platform deployed in 2014. This increases efficiency and through-put of RMT analysis, studies and change and reduces risk though the elimination of manual processes.
Security Tool Implementation for HVDC Controls
(commissioned Sep 2015)

HVDC controls including round-power, frequency keeping control and filter run-backs were commissioned in December 2013. These controls required changes in the SO tools for managing risk, dispatching the power system securely and controlling real time frequency.

Quantity of FK Procured by Island under FKC
(withdrawn - not required)

Assess whether a smaller frequency keeping band is possible with frequency keeping control (FKC) enabled.  If so, implement the necessary tool, operational procedures and contract changes to support such a reduction.

Inter-island Instantaneous Reserve Sharing: Implementation

FIR November 2014, SIR September 2015)

To use some of the increased capabilities of the HVDC control system to share reserve between islands.  Stronger competition in the instantaneous reserves market from the interim arrangements is expected to reduce energy costs. The interim arrangements also facilitate the development of the full national instantaneous reserves market.

Normal Frequency Management Strategy Project (to continue as a stand-alone project)

Consider the findings and associated impacts of work completed to date on Frequency Keeping Control (FKC) and Multiple Frequency Keeping (MFK). Matters to be considered and assessed include the Asset Owner Performance Obligations (AOPOs), consideration of options for the national market for frequency keeping, the frequency keeping selection tool, multiple frequency keeping, the frequency keeping ancillary service and dispatch.

Options for management of normal frequency will be proposed and will include consideration of operational management, tool change implications and market implications.

The objective of this work is to ensure provision of stable frequency at the lowest long term cost to consumers.

National Market for Instantaneous Reserve (commissioned Oct 2016)

Developed a national market for instantaneous reserve that enables efficiency gains and reduction in the total reserve procurement requirements.  The project updated market design to reflect the transfer of instantaneous reserves from one island to the other via the high-voltage, direct current (HVDC).

National Market for Frequency Keeping

This project has been withdrawn following the changes the SO made to the management of frequency keeping in April 2015. Further work on frequency management is being done under the Normal Frequency Management Strategy Project listed above.

Efficient Procurement of Extended Reserves: Implementation (removed from the RFM programme and established as an independent project)

Deliver and implement the new automatic under frequency load shedding (AUFLS) scheme and obligations to comply with new Code requirements.  The new arrangements are expected to result in more efficient provision and use of extended reserves.

Review of Instantaneous Reserve Markets (to continue as a stand-alone project)

To undertake a fundamental review of the instantaneous reserve products and markets.  The review will allow us to understand whether we can reduce barriers to entry, improve procurement efficiencies and enhance performance of the reserve market.