System Security

Roadmap
Planning, building and operating
the NSW transmission system
at up to 100% instantaneous
renewable energy
Acknowledgement of Country
In the spirit of reconciliation Transgrid acknowledges the
Traditional Custodians of the lands where we work, the lands
we travel through and the places in which we live.
We pay respects to the people and Elders, past, present and
emerging and celebrate the diversity of Aboriginal peoples
and their ongoing cultures and connections to the lands and
waters of NSW and ACT.
Foreword
To help achieve Australia’s 2050 net zero target, the Federal As early coal retirement, electrification and changing consumer
Government has committed to modernising the electricity grid to choices accelerate Australia’s clean energy transition, market and
grow the annual share of renewables to 82% by 2030. This modern transmission operators need to be proactive. We must innovate,
grid will be radically more complex and dynamic than the system collaborate, test and solve issues now if we are to achieve the
it is replacing. As Transgrid builds the thousands of kilometres goal of a rapid transition to a low emissions energy system while
of new transmission required to connect this new network, we maintaining reliability.
must also invest in the new technologies and capabilities required Transgrid proactivity exemplifies our commitment to keep costs
to keep it operating safely, securely and reliably. Otherwise, the down for the electricity customers of NSW. Transmission is required
impact on consumers – in terms of both cost and reliability – to drive down the costs of wholesale electricity as generation
will be unacceptable. diversifies. Acting now will ensure that we stay on pace with the
As the NSW Transmission Network Service Provider (TNSP), demands of the clean energy transition and avoid constraints to the
Transgrid must plan for, build, maintain and operate the backbone energy system that would cost customers in the long run. We are
of this new grid while meeting our obligations to maintain the safety, building now so consumers don’t have to pay later.
reliability and security of the transmission system in accordance with Drawing on international learnings, independent modelling and
the National Electricity Rules (NER). Transgrid’s own experience of the energy transition, this paper:
In the next decade, Transgrid will invest more than $14 billion to build • Outlines the complexities involved in transitioning to and
the infrastructure required to support the energy transition. For every operating a modern electricity network and our role in
dollar spent on highly visible generation, storage and transmission navigating this future
infrastructure, we must also invest two cents on less visible system
• Identifies the technologies and capabilities required to
security and operability. This is essential to make sure the grid
construct and operate a grid securely at up to 100%
operates with the reliability and delivers energy at the cost that
instantaneous renewable generation
NSW customers have come to expect.
We hope this Roadmap informs stakeholder understanding of the
The scale, speed and challenge of our clean energy transition is
technologies, capabilities and capacity needed to plan, build, operate
enormous. Australia is attempting a world first: a large-scale grid
and manage a 100% instantaneous renewable power system with the
dominated by wind and solar power built at break-neck speed. This
levels of reliability, security and safety customers expect.
energy system will incorporate a wider range of technologies, more
diverse geographical locations, higher variance in demand, and
greater reliance on storage and active management of power flows.
Many roles are changing. New skills will be required in an industry
already facing talent shortages and an ageing workforce and we must Brett Redman
also account for global competition for clean energy infrastructure at
a time of constrained supply chains.
All of this adds complexity, risk and volume to the work of the teams
planning, building and operating our transitioning grid. If these risks
are not addressed, Australia’s clean energy transition will be beset by
costly uncertainty and delays. We would face the real possibility of
missed emissions targets and higher power prices as grid reliability
and power supply security come under pressure.
The June 2022 National Energy Market (NEM) crisis highlighted the
potential cost of energy system disruption. We are already losing
hundreds of millions of dollars a year in consumer value to grid
congestion. With 80% of NSW’s coal generation capacity expected
to retire in the next 10 years, we cannot wait and must urgently
accelerate the investment in all areas of the clean energy transition.

System Security Roadmap iii

Executive summary
Australia is executing one of the world’s most ambitious and rapid clean energy
transitions. Surging renewable energy generation, storage and the decline in coal
generation is reshaping our power system.
Twenty years ago, eight coal generators provided nearly all of – Accelerating the delivery of transmission projects will increase
NSW’s power, with 12GW of capacity. By 2033, 80% of current and bring forward consumer benefits, while delaying them
coal-fired capacity will have retired, with hundreds of large scale will cost consumers more. Every day that the delivery of the
wind and solar generators, storage systems, and millions of rooftop transmission backbone is delayed is estimated to cost average
solar installations providing 28GW of new capacity to the NSW residential consumers an extra $1 on their energy bills.
power system. • Replacing the system security services that were previously
As a result of this surge in renewable generation capacity, the provided by coal generators is a non-negotiable step in the
Australian Electricity Market Operator (AEMO) projects that short energy transition and the pathway to lower energy prices for
periods of time where renewable generation exceeds total demand consumers.
across the NEM could occur as early as 2025 and will be common – To provide these new sources of system security in NSW,
by 2030. approximately $2.2 billion of investment is required over the
next decade, representing around 1.5% of total electricity
Planning, building, managing and operating a grid capable of 100%
system costs.
instantaneous renewable energy generation requires a fundamental
transformation. The transmission network must grow to ensure – Proactively investing in new system strength capacity is
reliable supply from increased but intermittent renewable generation projected to deliver $5 in benefits to consumers for every $1
capacity. As coal generators retire from the power system, new spent, by unlocking low-cost renewable energy and reducing
sources of system security services will be urgently needed. dependence on aging and high-cost fossil fuel generators to
The increasing supply of renewable power will also make the power provide these services on an ongoing basis.
system more volatile and dynamic, and the grid will operate closer to • A step-change in analytical and operational capabilities and
the edge of its technical limits for power system security. capacity is required to plan, manage and operate an increasingly
complex power system.
The combination of more renewable generation, declining coal
generation, lower minimum demands, new grid infrastructure and – An investment of $300 million is required in the next decade
new technologies is creating an exponentially more complex power to uplift Transgrid’s operational technology tools, headcount
system. System complexity is not a ‘future problem’; it is already and training, representing approximately 0.2% of total
making the power system more difficult to operate and increasing electricity system costs in NSW.
risks to consumers. – Investing in operability uplift is projected to deliver over $4
in benefits to consumers for every $1 spent by ensuring grid
In response, the builders, asset managers and operators of this
operators are equipped to deal with emerging challenges,
system will need to solve new problems, harness emerging
and avoiding disruptive and costly power outages that may
technologies and uplift their skills. Without modern tools and new
otherwise occur.
skills to operate the network, the risk to Australia’s power supply
will become unacceptable. It will be technically possible to operate the NSW power system at
100% instantaneous renewables, but only once the foundational
Uplifting three essential pillars is vital to continue to plan, build and pre‑requisites of energy reliability, system security and operability
operate a safe, reliable and low emissions power system able to are in place. These are not negotiable.
operate securely at up to 100% instantaneous renewable energy.
In light of the rapid transformation of the power system, a urgent
• The transition to renewable energy is the only pathway to lower acceleration in the delivery of these investments and capabilities
energy prices and easing the growing cost-of-living pressures on is required.
Australians. There can be no transition without transmission.
This report outlines the work involved in each pillar and Transgrid’s
– Transgrid is investing $14 billion in transmission infrastructure plans to deliver each of them. All three are essential for the NSW
in NSW over the next decade. Every dollar spent on power system to respond to and thrive in the new energy landscape,
transmission is projected to return more than twice this in providing clean, reliable and affordable electricity to Australians.
benefits to customers. Transmission enables cheap, renewable
electricity to flow to consumers, and more supply will help
lower high wholesale energy prices.

iv System Security Roadmap

Transgrid’s delivery of three critical pillars will enable the NSW transmission system to operate safely
and securely at up to 100% instantaneous renewable energy.

Energy Reliability System Security Operability

Deliver large-scale transmission Deploy new power system Advanced tools and additional
infrastructure to connect and share technologies and services to maintain resources and training to plan,
new renewable generation and the secure operating envelope of manage and operate a complex
storage with customers as ageing coal the grid without the operation of power system capable of 100%
generators retire. thermal generation. instantaneous renewable generation.

By 2033, Transgrid must

Deliver 2,500km of transmission lines and • Deploy the equivalent of • Deploy Operational Technology
supporting infrastructure ($14 billion) to: 21 synchronous condensers to replace tools to increase network visibility,
• Enable the connection of 17GW system strength from retiring coal forecasting, situational awareness
of new largescale renewable and generators ($2.2 billion) and decision support to enhance real-
storage capacity • Co-optimise supply of other system time operations, planning and asset
security services including inertia and management ($140 million)
• Integrate 5 renewable energy zones
into the transmission backbone voltage support • Increase operations, planning and
• Trial and prove the suitability asset management headcount and
• Expand transmission interconnection
of new technologies to support training to plan, manage and operate
between regions and states
system security a more complex power system
($16 million per annum)
• Establish secure operating envelopes
to manage system security in real-
time during high renewable and low
demand periods

Figure 1: Transgrid’s three critical pillars to support Australia’s clean energy transition

System Security Roadmap v

vi System Security Roadmap
 Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
A transition into uncharted territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
The end of coal generation dominance 1
Rise of the renewables 2
Geographic dispersion 3
Prosumer prominence 4
Approaching 100% instantaneous renewables 5
A declining power system heartbeat 6
Radically more dynamic and volatile 6
Exponential increase in complexity 8
How Transgrid is preparing the NSW power system for 100% instantaneous renewables 8

Pillar 1: Energy reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

There is no transition without transmission 10
1.1. Foundation for clean energy production 10
1.2. The cost of congestion 10
1.3. The new energy superhighway 12
1.4. A global race for resources 14
1.5. Accelerating and securing the delivery of critical infrastructure 14
1.6. More than just poles and wires 15
1.7. Securing talent, growing skills 15

Pillar 2: System security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Decoupling system security from coal generation 17
2.1. System security: the heartbeat of the power system 17
2.2. Gaps in system security are emerging 17
2.3. Resolving system strength is key to enable 100% instantaneous renewables 20
2.4. A diverse range of system strength solutions are available 22
2.5. Inertia and voltage support requirements follow a similar path 24
2.6. A co-optimised approach to meeting system security needs 25
2.7. A promising role for grid-forming inverters in supporting power system security 25
2.8. Ongoing analysis is required 26

Pillar 3: Operability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Planning and operating a more complex power system 28
3.1. Driving complexity in the NSW power system 28
3.2. Transgrid’s role in operating the NSW transmission system 28
3.3. A complex network operates closer to the edge 29
3.4. New connections and system planning require intense scrutiny 30
3.5. Asset management and operation is a delicate balance 31
3.6. Capability and capacity gaps as we approach 100% instantaneous renewables 31
3.7. Transgrid’s plan for deploying new operational technology tools 36
3.8. Digital twin: an advanced modelled representation of the physical power system 36
3.9. Improved situational awareness and decision support for the Transgrid control rooms 37
3.10. Growing our human capital and capabilities 38

We’re making the clean energy transition possible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

System Security Roadmap vii

A transition
into uncharted
territory
A transition into uncharted territory
Australia is executing one of the world’s most ambitious and rapid clean energy transitions. Surging
renewable energy generation, storage and the decline in coal generation is reshaping our power system.
In response, we must change the way we plan, manage and operate the system.

The end of coal generation dominance

Historically, coal generation has dominated the NSW power system. AEMO’s 2022 Integrated System Plan projects that by 2033, only 17%
In 2007, coal represented 88% of NSW’s electricity generation. Fast of NSW’s electricity generation will come from coal.
forward 15 years to 2022 and that figure was 68% and falling.1 Over the next decade, 80% of NSW’s coal capacity is expected to
The surge in renewables and storage is making it more difficult retire, representing 7GW of generation capacity exiting the system.3
for coal generators to remain profitable. 2 A combination of aging The planned rate of decommissioning of coal units in NSW is four
assets, volatile fuel prices, falling daytime electricity prices and times higher than has been observed in Europe or the United States
environmental and social license pressures are accelerating coal over the last 5 years, proportional to total generation capacity.4
owners’ plans for plant retirements. This can be observed in the
acceleration of coal retirement timing compared to what was
projected in 2020. Further acceleration is possible.

9,000
Capacity (MW)

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0
2039-40
2029-30

2038-39

2040-41
2034-35
2033-34

2035-36
2028-29

2036-37

2037-38
2025-26
2024-25
2023-24

2041-42
2032-33
2026-27

2030-31
2027-28

2031-32

ISP 2020, Central Scenario Progressive change (ISP 2022) Hydrogen superpower (ISP 2022)
Slow change (ISP 2022) Step change (ISP 2022) Currently announced

Figure 2: NSW coal retirement trajectory. AEMO 2022 draft and final Integrated System Plan and 2020 Integrated System Plan

1. OpenNEM, 2023, Energy, NSW, https://opennem.org.au/energy/nsw1/?range=all&interval=1y

2. AEMO, 2023, Quarterly Energy Dynamics Q1 2023
3. AEMO, 2022, Integrated System Plan, https://aemo.com.au/en/energy-systems/major-publications/integrated-sys-
tem-plan-isp/2022-integrated-system-plan-isp, additional to the Liddell Power Station that recently ceased operations.
4. https://globalenergymonitor.org/report/boom-and-bust-coal-2023/

System Security Roadmap 1

Rise of the renewables
To achieve a net zero goal by 2050, 50GW of large scale renewables and storage is projected to be built in NSW. This is six times the capacity
of coal generation exiting the system.5

100,000
Installed capacity (MW)

80,000

60,000

40,000

20,000

0
2029-30

2035-36
2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2030-31

2031-32

2032-33

2033-34

2034-35

2036-37

2037-38

2038-39

2040-41

2041-42

2042-43

2043-44

2044-45

2045-46

2046-47

2047-48

2048-49

2049-50

2050-51
2039-40
Rooftop solar Wind Peaking gas + liquids Coordinated DER storage Black coal Dispatchable capacity
Utility-scale solar Hydro Mid-merit gas Distributed storage
DSP Utility-scale storage

Figure 3: Projected generation capacity in NSW by technology (AEMO, 2022 Integrated System Plan)

By FY2033, renewables are projected to represent over 80% of electricity production in the NEM6, up from 35% today, and is expected to
grow to 97% by 2050. Coal generation on the other hand will fall from 68% in FY2022 to 17% in FY2033 and 0% by FY2040. During the same
period, total NSW generation will rise from 68GWh to 139GWh per year to meet the growing demand for electricity, primarily as a result of the
electrification of cars, industry and buildings.

FY22 FY33 FY50

68GWh 91GWh 139GWh

NSW generation NSW generation NSW generation

Rooftop solar Utility-scale solar Wind Hydro Gas Coal

Figure 4: Actual FY2022 and projected electricity generation in NSW by technology FY2033 and FY20507

5. AEMO, 2022, Integrated System Plan, https://aemo.com.au/en/energy-systems/major-publications/integrated-sys-

tem-plan-isp/2022-integrated-system-plan-isp
6. AEMO, 2022, Integrated System Plan, https://aemo.com.au/en/energy-systems/major-publications/integrated-sys-
tem-plan-isp/2022-integrated-system-plan-isp
7. AEMO, 2022, Integrated System Plan

2 System Security Roadmap

Geographic dispersion
Renewable generators are far more geographically dispersed than existing coal power stations. Installing the vast fleet of wind and solar
farms and battery energy storage systems in regional NSW will require a momentous change in the electricity network. To reach these new
renewable generators, we need new transmission connections from renewable energy zones (REZs) to the transmission backbone and strong
interconnections between states to share power, energy storage and system security services. Figure 5 shows the evolution of the NSW
generation fleet, moving from centrally located near load centres to geographically dispersed across regional NSW.

2000 2023 (current)

2033 2050

Size indicates relative capacity

Coal Load centre Snowy Hydro Renewables and storage

Figure 5: The NSW power system in 2000, 2023 (current) and projected in 20338 and 2050 (conceptual image)

8. AEMO, 2022 Integrated System Plan

System Security Roadmap 3

Prosumer prominence
The deployment of rooftop solar has outpaced expectations; one in four Australian homes now have solar on their roof. This growth is expected
to continue; 13.5GW of rooftop solar is projected to be installed in NSW by FY2033, twice the capacity that was projected in 2020 and three
times the capacity projected in 2018, as shown in Figure 6.

20,000
NSW rooftop solar installed capacity (MW)

15,000

10,000

5,000

0
2018-19

2029-30

2035-36
2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2030-31

2031-32

2032-33

2033-34

2034-35

2036-37

2037-38

2038-39

2040-41

2041-42

2042-43
2039-40
ISP 2018 Neutral ISP 2020 Central ISP 2022 step change

Figure 6: 2018, 2020 and 2022 forecasts of rooftop solar growth in NSW9

This rapid growth in rooftop solar is driving down the minimum demand seen on the NSW transmission system. While minimum demand
historically occurred during the very early morning, this has shifted to the middle of the day, typically in spring or autumn, when there
is significant rooftop solar generation and little need for heating and cooling.
Figure 7 shows the rapidly declining projections for minimum demand in NSW, commensurate with the projected uptake of rooftop solar. Based
on the current projections, there may be periods within the next 15 years when rooftop solar can supply all the state’s electricity needs.

6,000
NSW minimum operational demand P50 (MW)

5,000

4,000

3,000

2,000

1,000

-1,000
2022

2023

2025
2020

2021

2026

2027

2028

2029

2034

2035
2024

2033

2038

2040
2030

2031

2032

2036

2037

2039

Actual 2019-2020 central forecast 2020 central forecast 2021 central forecast 2022 central forecast

Figure 7: Forecast minimum operational demand in NSW10. Yearly record for minimum demand indicated.

9. AEMO, Integrated System Plans 2018, 2020, 2022

10. AEMO 2019-2022, NEM Electricity Statement of Opportunities (ESOO)

4 System Security Roadmap

As minimum demands declines, the power system faces difficult Rooftop solar isn’t the only technology that will fundamentally alter
operating conditions on three fronts: the way our power system operates. Household batteries and electric
• The NSW electricity system currently relies on 7 coal generating vehicles are projected to surge in the coming decade, increasing the
units to be online at all times to support the stability and security variability and complexity of power flows across the system.
of the power system. If minimum demand falls below roughly
2GW (forecasted to occur at the end of this decade), then there Approaching 100% instantaneous
may not be enough electricity demand to keep those 7 coal
units running, leading to unsecure and potentially catastrophic
renewables
conditions. It will not be long before renewable energy generation will be able to
match electricity demand in the NEM for short periods of time. This
• The transmission system was designed to bring power from large
is likely to first occur on mild and sunny autumn and spring days,
generators to the distribution network and then to customers, not
with strong contributions from rooftop solar.
the other way around. As demand falls, parts of the distribution
network will start sending power back into the transmission South Australia has already experienced periods where wind and
system. These reverse power flows create extremely difficult solar produce more than 100% of state demand.11
operating conditions for transmission and distribution network Figure 8 presents the instantaneous penetration of renewables
operators alike, including for grid protection settings and load (horizontal axis) for every 30 minutes of the year in 2018-19, 2019-
shedding schemes. 20 and 2020-21, with a maximum of 55% instantaneous renewable
• As rooftop solar drives down minimum demands, grid voltages energy penetration observed in 2020-21. In October 2022, the
in those areas rise, changing the operating dynamics of the NEM reached a record 68.7% instantaneous share of renewable
system and requiring more frequent switching of reactive plant energy generation.12
to compensate (or installation of more reactive plant). Significant AEMO projects that short periods of 100% instantaneous renewable
cloud movement can create rapidly changing voltage levels on the energy generation may be possible as early as 2025, as indicated by
transmission system. the purple dots for 2024-25.

Figure 8: NEM-wide instantaneous penetration of renewable resources (large-scale and distributed)13

11. South Australia installed four synchronous condensers in 2021 to provide grid security services and in addition, two gas units run
at all times to keep the South Australian power system secure. This extra generation is exported to Victoria which currently has a
much lower penetration of renewables.
12. AEMO, 2023, Quarterly Energy Dynamics Q1 2023
13. AEMO, 2021, NEM Electricity Statement of Opportunities (ESOO)

System Security Roadmap 5

AEMO projects that by 2030 dispatch at 100% renewables will be common as minimum demand decreases and installed renewable capacity
increases. This will become more frequent through to 2050.

Figure 9: NEM-wide instantaneous penetration of renewable resources (large-scale and distributed)14

While in the future there may be sufficient capacity for potential

renewable generation to supply 100% of demand, having sufficient
power generation is alone not enough. Grid operators will not be able
to run the grid at 100% instantaneous renewable power until sufficient
new infrastructure has been deployed to manage power system
security without running coal or gas units.

A declining power system heartbeat Radically more dynamic and volatile

Coal, gas and hydro generators are synchronous machines, electro- The increasing supply of renewable power is radically altering the
magnetically coupled to the grid. As a by-product of normal behaviour of the NSW power system, making it more volatile and
electricity generation, these machines provide ‘system security’. dynamic – trends that will only increase as thermal generation
They help the power system to maintain a stable and reliable flow retires. Variable power production from renewables in response
of electricity – even in the face of unexpected events or disruptions to changing weather conditions will occur in different parts of
such as lightning strikes or equipment breakdowns. We can think of the network at different times of day. This will be compounded
these machines as providing the heartbeat of the power system. by increased load variance across power networks as prosumer
In contrast, existing renewable technologies require a strong grid technologies revolutionise the distributed consumption and localised
pulse to operate stably. If the grid’s electricity signal wavers due to production of power.
a disturbance, then renewables may in turn become unstable and As we approach and eventually achieve 100% instantaneous
disconnect, exacerbating any stability issues. renewable energy, the average demand profile will become less
As coal generators retire from the power system, the grid will lose stable and the difference between the day’s high and low operational
essential sources of system security. Without sufficient replacement demand will increase. As seen in Figure 10 on the day of NSW’s
services, the grid will not be able to operate safely, or at very high record minimum demand in April 2023, demand fell to 4.1GW during
levels of renewables for even a short period of time. the day before peaking at almost 8GW in the evening.
Ensuring a strong power system heartbeat is vital for the reliable
operation of a highly renewable power system.

14. AEMO, 2022, Integrated System Plan

6 System Security Roadmap

 9,000
Generation type (MW) / Operational demand (MW)

8,000

7,000
New NSW minimum
6,000 operational demand record:
4,101 MW at 1pm (AEST)
5,000

4,000

3,000

2,000

1,000

0
-1,000
01:00
00:00

02:00

05:00

06:00

07:00

08:00

09:00

10:00

11:00

12:00

14:00

15:00

16:00

17:00

18:00

19:00

20:00

21:00

22:00

24:00
03:00

04:00

13:00

23:00
Import Black coal Gas Battery storage Hydro Wind Utility-scale solar Rooftop PV NSW operational demand

Figure 10: Generation mix and demand profiles for NSW on a recent record minimum demand day15

Figure 11 presents a conceptual representation of a day that first hits 100% instantaneous renewable energy. Significant thermal generation is
seen during the early morning, is then replaced by significant rooftop and largescale solar and wind during the middle of the day, before thermal
generation ramps back up in the evening. This will result in large swings in power flows between the transmission and distribution systems to
facilitate storage and changes in generation.

100% instantaneous renewable energy

Generation type and operational demand

0MW
01:00

11:00

17:00

21:00
12:00

15:00
10:00

13:00

14:00

16:00

18:00

19:00

22:00
07:00
02:00

20:00
05:00
00:00

03:00

06:00

08:00
04:00

09:00

23:00

Thermal generation Rooftop PV Utility-scale solar Wind Storage generation Storage charging Operational demand

Figure 11: Operational demand and generation mix on a conceptual day operation at 100% instantaneous renewables16

15. AEMO, 2023, https://twitter.com/AEMO_Energy/status/1645626614250868736/photo/1

16. Adapted from AEMO, 2021, NEM Engineering Framework, Operational Conditions Summary, https://aemo.com.au/en/initiatives/
major-programs/engineering-framework

System Security Roadmap 7

Exponential increase in complexity • Innovative new technologies for energy storage and system
security services will become part of keeping the grid reliable,
Each change to the power system as we approach 100% secure and stable. Network Service Providers will need to test,
instantaneous renewable energy in the coming years will have a analyse and ratify new technologies to support their operations
compounding effect on the energy system’s complexity – and on the immediately – and continue to adopt operational innovation in the
complexity of planning, managing and operating it. Changes include: future.
• The growth in renewables which is adding hundreds of new
connections to the transmission system, and millions of Increased power system
connections to the distribution system. Increased renewable
penetration will mean more variable and unpredictable generation,
complexity is not a future problem,
not to mention more interactions within network control rooms. but one we must solve now.
• Dynamic power swings and equipment switching will become
more accentuated as generation shifts between sources,
storage and distribution across a greatly expanded power How Transgrid is preparing the NSW
network. This will lead to new operating conditions, with
increasing voltage swings and reverse power flows and more power system for 100% instantaneous
frequent cycling of network equipment. renewables
• The retirement of coal generation will remove key system security “By 2025 there will start to be sufficient renewable resource
services required to keep the grid stable. With less inherent potential in the NEM to, at times, meet 100% of demand… the
stability in the grid, the electricity system will become more first period of 100% instantaneous operation is a critical part of
susceptible to shocks. enabling future power system operability at net-zero emissions.” 17
• Connecting new renewables and constructing new transmission The NSW and national power system is transforming at an
infrastructure will require more frequent outages. Maintaining extraordinary speed. The NSW transmission system must undergo an
reliability while delivering new generation and transmission equally transformative uplift in its physical capacity and operational
infrastructure and balancing existing maintenance requirements capability. Transgrid must ensure security and reliability against the
will increase the complexity of system planning and operations. inherent risks of increased scale, complexity and change.
• New actors and roles, such as network operators for renewable Transgrid will need to invest in, or contract for, new system security
energy zones, will increase the number of parties involved in services and uplift of its operational technology tools and capacity
system management, increasing the complexity of control and to build, plan, manage and operate the power system. The following
communication during real time system operations. sections outline the three essential pillars necessary to enable
the secure operation of the NSW power system at up to 100%
instantaneous renewables, and Transgrid’s plans to deliver on each.

Transgrid’s three critical pillars to support Australia’s clean energy transition

Energy Reliability System Security Operability

Deliver large-scale transmission Deploy new power system Build capabilities and capacity
infrastructure to connect and technologies and services to to plan, manage and operate
share new renewable generation maintain the secure operating a complex power system
and storage with customers as envelope of the grid without the capable of 100% instantaneous
ageing coal generators retire operation of thermal generation renewable generation

Figure 12: Transgrid’s three critical pillars to support Australia’s clean energy transition

17. AEMO, 2022, Engineering Roadmap to 100 per cent Renewables 2022

8 System Security Roadmap

Pillar 1:
Energy reliability
Pillar 1: Energy reliability
There is no transition without transmission
More than 2,500km of new transmission lines is needed to facilitate the transition of the NSW electricity system from a centralised, fossil fuel
dominated grid to one powered by renewable energy. Only once sufficient renewable energy, storage and transmission capacity has been built
can the grid operate at 100% instantaneous renewables.
Over the next decade, Transgrid plans to invest more than $14 billion to build new transmission infrastructure, providing the interconnectivity
necessary to achieve the economic and environmental goals of the clean energy transition. Every dollar spent on transmission is projected to
return more than twice this in benefits to customers. Transmission enables cheap, renewable electricity to flow to consumers, and more supply
will help lower high wholesale energy prices.
Accelerating the delivery of transmission projects will increase and bring forward consumer benefits, while delaying them will cost consumers
more. Every day that the delivery of the transmission backbone is delayed is estimated to cost average residential consumers an extra $1 on
their energy bills.

1.1. Foundation for clean energy production

The backbone of the existing NSW transmission system was built to bring power from centrally located coal-fired power stations
to major population and load centres. It only needed weak interconnections between states and out to regional areas.
In a grid powered by geographically distributed renewable energy, regional interconnection is essential, providing:
• Access to the lowest cost energy resources, fostering wholesale market competition and lowering prices
• Access to geographically dispersed renewable energy to offset high-emissions fossil fuel-based generation
• Energy sharing between regions, reducing the requirements for energy storage and dispatchable generation, lowering system
costs and energy prices
• The connection of strategically located large energy storage projects including Snowy 2.0, so these firming resources can be
shared between regions
• An increase in diversity of supply options, improving system security and resilience
As coal generators leave the system and new geographically dispersed renewable generators are built, the transmission system must evolve
to connect new resources and to strengthen interconnection.

1.2. The cost of congestion

Congestion occurs because there are physical limits to the network’s ability to carry electricity securely and safely. The increased deployment
of renewables into a grid with limited spare capacity is increasing congestion, meaning that at times with high wind and solar generation there
is often not enough transmission capacity to transmit all the power to consumers, so an increasing proportion is spilled (or curtailed).
Curtailment of renewable generation is up 40% in 2023 compared to the year prior, driven primarily by increases in NSW and Victoria.18
Figure 13 presents the lost financial value in the NEM due to transmission congestion or power system security constraints being reached and
potential low-cost renewable power being replaced with more expensive fossil-fuel generation. This has grown significantly since 2018 and a
record $500 million was lost due to constraints in 2022. The largest lost value due to congestion and system security constraints is observed
in NSW.

$500m
Binding impact

$400m

$300m

$200m

$100m

0
2017 2018 2019 2020 2021 2022
FCAS NSW VIC QLD SA TAS

Figure 13: Lost financial value due to congestion and constraints in the NEM 19

18. https://aemo.com.au/newsroom/news-updates/aemo-ceo-speech-at-ceda-rewiring-the-nation
19. AEMO, 2022, Congestion Information Resource, https://aemo.com.au/en/energy-systems/electricity/national-electricity-market-nem/system-operations/congestion-informa-
tion-resource/statistical-reporting-streams

10 System Security Roadmap

 From January to March 2023, the links from Victoria to NSW
and Tasmania were at their limits for 42% and 57% of the time
respectively. And during those hours when the sun is producing
free electrons, the links were binding for two-thirds of the time to
NSW, and over 80% of the time to Tasmania. In other words, parts
of our energy highway are at gridlock.”
Daniel Westerman, AEMO20

The implications of limited transmission interconnectivity between states are also starting to show. Price separation is appearing between
states with higher penetrations of renewables. In Q1 2023, wholesale prices were negative in Victoria and South Australia for 50-60% of the time
between 9am – 5pm. 21

200
$/MWh

150

100

50

-50
00:00 02.00 04:00 06:00 08.00 10:00 12:00 14.00 16:00 18:00 20.00 22:00

NSW VIC QLD SA TAS

Figure 14: Average NEM prices by state in Q1 2023.22

20. https://aemo.com.au/newsroom/news-updates/aemo-ceo-speech-at-ceda-rewiring-the-nation
21. https://aemo.com.au/newsroom/news-updates/aemo-ceo-speech-at-ceda-rewiring-the-nation
22. AEMO, 2023, Quarterly Energy Dynamics

System Security Roadmap 11

1.3. The new energy superhighway
AEMO’s Integrated System Plan, the NSW Government’s Electricity Infrastructure Roadmap and Transgrid’s Transmission Annual Planning
Report outline a co-developed and comprehensive plan to support the transformation of the energy system. These plans have identified
essential development paths for transmission infrastructure in NSW, as part of a broader plan for 18 separate transmission projects and more
than 10,000 km of new transmission lines across the NEM. 23
In NSW, the new energy superhighway – strengthening the backbone of the power system – will include:

Southern Superhighway Sydney Ring Northern Superhighway

(2024–2028) (2028–2031) (2028–2033)
 EnergyConnect 2024-26  Hunter Transmission Project 2028  New England REZ transmission link
 HumeLink 2026  Sydney Southern Ring 2031 2028 (phase 1)
 VNI West 2028  QNI Connect 2033

1,600km $7b* 240km $2.5b* 580km $5b*

Line Investment Line Investment Line Investment

3GW 10GW 6GW

Direct renewables plus Snowy 2.0 Renewables Added network capacity

 EnergyConnect – Delivery  Hunter Transmission Project#  New England renewable energy

date 2024 (stage 1) and 2026 – Delivery date 2028, zones transmission link –
(stage 2), enabling the reinforcing supply to Sydney, Delivery date 2028 (phase 1),
sharing of energy and Newcastle and Wollongong load enabling New England REZ
unlocking renewables centres and facilitating the flow capacity to reach Sydney,
between NSW, South of electricity between the Wollongong Newcastle load
Australia and Victoria Central West Orana renewable centres
energy zone and Sydney. This
 HumeLink – Delivery date also includes enabling the  QNI Connect – Delivery date
2026, enabling the 850MW Waratah Super Battery 2033, enabling greater sharing of
integration of new, clean to unlock extra transmission renewable energy between NSW
energy from South-West capacity into the Sydney region and Queensland
NSW REZ and unlocking the
full capacity of Snowy 2.0 to  Sydney Southern Ring –
be shared with the Sydney, Delivery date 2031,
Wollongong and Newcastle strengthening southern
load centres connection to Sydney,
facilitating additional flow from
 VNI West – Accelerated HumeLink
delivery date to 2028,
facilitating greater energy
sharing between NSW and
Victoria and connecting into
EnergyConnect

23. AEMO, 2022 ISP, pg. 12-13

* Estimated investment cost based on AEMO’s Draft 2023 Transmission Expansion Options Report, AEMO 2022 Integrated System Plan and Transgrid estimates
# The Hunter Transmission Project is a NSW State Government Priority Transmission Infrastructure Project. It is present here to show its essential need in closing the
Sydney Ring. Investment costs are presented as per AEMO’s Draft 2023 Transmission Expansion Options Report.

12 System Security Roadmap

 Mudgeeraba

Lismore
Dumaresq

QNI Connect
New
England
REZ Coffs Harbour

Armidale

New England REZ

Transmission Link
Central-West
Orana REZ Port Macquarie

Muswellbrook Hunter
Wollar
Dubbo Transmission Project

Bayswater
Hunter Central
Coast REZ

Eraring Newcastle
Bundey
Mt Piper 500
Sydney
Buronga Southern Ring

South-West HumeLink Sydney

Red Cliffs Bannaby
REZ Illawarra
REZ
Canberra
Wagga Wagga
Dinawan Transgrid
EnergyConnect 500kV lines
Southern Superhighway

Gugga Sydney Ring upgrades

VNI West Northern Superhighway

Kerang
Snowy 2.0 Existing Sydney Ring

Wodonga

Potential future Renewable

Dederang
offshore wind zones Energy Zone

Transgrid Substations
330kV lines

Figure 15: Key NSW transmission infrastructure development projects

The connection of renewable energy zones, upgrades to the transmission backbone and strengthened connections between states will help to
alleviate the costly congestion that is growing across the grid. Transmission infrastructure must match renewable capacity development and be
ready before thermal generator retirement.
• Delays will lead to higher energy bills. For every day that the • Accelerating interconnection will increase reliability.
optimal development path of AEMO’s Integrated System Plan Developing more interconnectors will enable NSW, Victoria and
is delayed, average residential consumer bills will increase by South Australia to support each other through unexpected
around $1 (in 2022 real dollars). A one-year delay in the optimal outages, with insurance value working in both directions. NSW
development path’s transmission investment will cost residential is forecast to exceed the 0.002% Unserved Energy reliability
and business customers in the NEM $900m per year over the standard by 2027-28 if transmission projects, such as HumeLink
period of 2026-40. A four-year delay would cost a staggering and the Hunter Transmission Project, are not completed by
$82bn over that same 15-year period. 24 The extra cost would be this time. 25
due to the need for expensive gas or coal generation to replace
underutilised renewable capacity – an eventuality that would also
jeopardise emissions targets.

24. Nexa Advisory with Endgame Economics, 2022, Modelling Electricity Bill Impact of Transmission Project Delays, https://www.
energynetworks.com.au/news/energy-insider/2022-energy-insider/what-a-difference-a-day-can-make-to-energy-prices/ & ENA,
2023, What a difference a day can make to energy prices, https://www.energynetworks.com.au/news/energy-insider/2022-ener-
gy-insider/what-a-difference-a-day-can-make-to-energy-prices/
25. AEMO, 2022 Electricity Statement of Opportunity, pg.57

System Security Roadmap 13

1.4. A global race for resources 1.5. Accelerating and securing the
Australia is not alone in pursuing a clean energy transition. We delivery of critical infrastructure
are one of many countries racing to secure critical, large-scale
Transgrid is working to ensure our supply chain remains strong
equipment, materials and skilled labour to deliver critical energy
and accelerate where possible. Our Powering Tomorrow Together
infrastructure projects in an environment of geopolitical volatility.
program will accelerate and secure critical infrastructure
This means that transmission projects, renewable and storage projects, using a bundling approach to de-risk supply chain and
developments and system security infrastructure in Australia will financial pressures.
be increasingly subject to procurement and supply chain risks,
The Powering Tomorrow Together program, the bundling of
including shortages, price volatility and extended lead times. From
procurement for the EnergyConnect, HumeLink and VNI West
March 2020 to March 2022, prices for both aluminium and copper,
projects will allow Transgrid to negotiate long-term supply
key components in transmission infrastructure, more than doubled
agreements for new equipment and materials necessary, with
and surged past pre-pandemic levels. 26
advance orders that put us ahead of global competition. Transgrid
The war in Ukraine has also affected critical energy technology has already secured key equipment with Hitachi Energy, including
supply chains, with Russia and Ukraine accounting for 33% of signing a contract to supply 15 500kV shunt reactors for use on the
world-wide imported semi-finished steel products and 17% of class VNI West and HumeLink projects. The Powering Tomorrow Together
one Nickel production. 27 Gas shortages in response to the war have program will support further purchasing at scale, ensuring the
driven up the rate of electrification across Europe and increased the supply of:
speed of their energy transition further.
• 14,500 km of transmission line conductor – enough to stretch
While producers of transmission infrastructure are working to from Sydney to Los Angeles
increase their production capabilities, many are reluctant to
• 58,000 tonnes of steel to build 1,350 transmission towers
build significant new capacity for what is seen as a one-off spike
in demand. 28 Bundling projects into the Powering Tomorrow Together program
will yield a capex saving of approximately $500 million, from savings
in procurement, labour and avoided inflation costs that can be
passed onto consumers. Combined with the savings from a three-
year acceleration of VNI West made possible by this program, NSW
residential customer bills are projected to be reduced by $12 a year.

Powering Tomorrow Together

$500m saves $12 on customer 3-year acceleration of

capex savings bills each year VNI West to 2028

Figure 16: projected savings from the Powering Tomorrow Together program

26. McKinsey, 2022, Building resilient supply chains for the European energy transition
27. McKinsey, 2022, Building resilient supply chains for the European energy transition https://www.mckinsey.com/industries/elec-
tric-power-and-natural-gas/our-insights/building-resilient-supply-chains-for-the-european-energy-transition
28. The Economist, 2023, Technology Quarterly 2023, https://www.economist.com/technology-quarterly/2023/04/05/adding-capaci-
ty-to-the-electricity-grid-is-not-a-simple-task

14 System Security Roadmap

1.6. More than just poles and wires 1.7. Securing talent, growing skills
To improve energy reliability, reduce delivery times and lower costs To ensure the delivery of Transgrid’s critical transmission projects,
for consumers, Transgrid is developing multiple innovation projects we will need to add over 400 permanent employees and many
using alternatives to traditional infrastructure. These projects are more contracted workers over the next 5 years. Much of this work
about unlocking capacity in our existing transmission network: will be in regional New South Wales, bringing new opportunities to
• Installing SmartValve technology at the Stockdill and Yass these communities.
substations has enabled 170MW of extra energy to flow between In the context of a major clean energy skills shortage, Transgrid is
Victoria and New South Wales – enough extra energy to power looking to develop future talent through up-skilling or side-skilling
30,000 NSW and ACT homes. SmartValves help to increase parts of the existing industrial workforce and nurturing emerging
energy flows on existing transmission lines by diverting electricity talent entering the workforce for the first time.
from lines that are experiencing constraints to those better able • Retaining, redeploying and reskilling the talent we know. We
to carry the electrical loads. are creating more flexibility in how people can move around the
• Combining procured battery energy storage as a service at organisation, so teams and skills can be redeployed as demand
Parkes and Panorama with dynamic reactive power support for roles shifts. Training will play a crucial role in this, enabling
devices will defer the construction of a new transmission line employees to handle ever more complex issues and contribute
between Wellington and Parkes. across functions. To ensure we have the construction talent on
• Procuring battery energy storage as a service from a battery the ground to deliver transmission projects, we are implementing
energy storage system in South-West NSW to increase transfer a re-engagement program to help contractors transition
capacity on the existing network and defer the construction of a between projects.
new transmission line between Darlington Point and Dinawan. • Attracting new talent from other markets. Transgrid has
• Procuring battery energy storage as a service at Gunnedah or established a roadmap to recruit talent from other industries and
Narrabri will cater for increased electricity demand from new from overseas. Within Australia, this includes pursuing alternative
industrial loads in the North West Slopes area of NSW, limiting pathways for talent in the energy sector via cross-boarding
new investment in traditional transmission infrastructure. development in aligned skills industries, including emergency
services, defence, mining, manufacturing and oil and gas.
• Procuring compressed air storage as a service for backup supply
at Broken Hill, when the single 220kV transmission line is out of • Developing future talent in Australia. Transgrid is increasing
service due to a planned or unplanned outage. Backup power the training available in regional centres that will host most of
supply was historically provided by two diesel-fired turbines the state’s clean energy infrastructure. We are partnering with
owned and operated by Essential Energy. the regional universities in Wagga Wagga and Newcastle to
develop opportunities and collaborative support for research,
• Facilitating the delivery of the 850MW Waratah Super Battery and
infrastructure, training, and education and employment
delivering a special protection scheme and additional network
pipelines for regional areas.
upgrades to unlock capacity and energy security following the
planned closure of the Eraring Power Station in mid-2025. The
Waratah Super Battery provides a virtual transmission solution
that unlocks latent capacity in the existing transmission system,
allowing consumers in the Sydney, Newcastle, Wollongong
demand centres to access more energy from existing generators.
These projects are just the beginning. As the clean energy
transition powers forward, Transgrid must continue to test, trial,
prove and implement innovative technologies that can unlock
extra transmission capacity on our network and lower costs for
NSW consumers.

System Security Roadmap 15

Pillar 2:
System security
Pillar 2: System security
Decoupling system security from 2.2. Gaps in system security are
coal generation emerging
As coal generators become less available and retire, and new The NSW power system has historically relied on a minimum
inverter-based renewables connect to the grid, new sources of combination of coal generating units to be online at all times, to
system security services are urgently needed. Only once we have provide the stable heartbeat of system security to keep the grid
decoupled the provision of system security services from thermal operating within its safe technical envelope. This can no longer
generation can the grid operate at 100% instantaneous renewables. be assumed.
Over the next decade, Transgrid expects that the provision of new More than 80% of NSW’s coal capacity is projected to retire in
system security infrastructure to replace security services currently the next ten years.30 Yet even prior to retirement, there could be
provided by coal generators in NSW requires an investment of periods of the year where only half of the coal units are generating
approximately $2.2 billion. power, and therefore providing system security, a result of co-
To 2033, system security investment in NSW is expected to incident planned maintenance, unplanned outages and decisions by
represent approximately 1.5% of NSW’s total electricity system owners to ‘economically decommit’ their plant during periods of low
spending, including spending on generation, storage, system wholesale market prices.
security, the distribution network and consumer spending on
distributed energy resources.
Proactively investing in new system strength capacity is projected to
deliver $5 in benefits to consumers for every $1 spent, by unlocking
low-cost renewable energy and reducing dependence on aging
and high-cost fossil fuel generators to provide these services on
an ongoing basis.

2.1. System security: the heartbeat of

the power system
System security services have traditionally been provided by
synchronous machines, such as coal, gas and hydro generators, as
an inherent by-product of their generation of electricity. We can
think of synchronous machines as providing a strong heartbeat to
the power system, helping ensure that the signal of the electricity
waveform remains strong.
These units are ‘electro-magnetically’ coupled to the grid, meaning
every generating unit in the whole of the NEM spins in sync,
50 times per second. The mass of the spinning turbines (each
weighing tens or hundreds of tonnes) and their electro-magnetic
coupling allow them to absorb or respond to shockwaves that result
from unexpected events or disruptions to the network (such as
equipment trips or failures). These synchronous machines help the
system operate within a secure technical envelope, by providing
reactive support, inertia and fault ride through capabilities.
Wind, solar and battery storage systems use inverter-based
methods for grid connection and typically require a strong voltage
waveform from the grid to ‘lock’ onto and follow. Hence, they are
known as ‘grid-following’ renewables or batteries. 29 If the grid’s
voltage waveform wavers due to a disturbance, then grid-following
renewables may become unstable and disconnect. They need a
strong source of system security to operate stably.
Just like a human heartbeat, ensuring that the grid’s heartbeat
remains strong and consistent as coal generators retire from the
system and renewables are connected is critical to maintain the
functioning of the power system.
Under the NER, Transgrid is responsible for ensuring the power
system ‘heartbeat’ in NSW remains strong, by maintaining specified
levels of key system security services including system strength,
inertia and voltage control.

29. Some utility scale battery storage systems have the ability to operate in grid-forming modes. Future technological developments could
extend grid-forming modes of operation to other renewable generation sources. See “What is a grid forming battery” on page 26.
30. Or 7GW of coal capacity, as projected under AEMO’s Step Change scenario (in addition to the recent retirement of the Liddell

System Security Roadmap 17

Figure 17 shows that by FY2025, periods are projected when generation dispatched in the energy market does not include enough
synchronous units to keep the NSW power system secure, as shown by the yellow line falling below the minimum requirements (dotted black
line). This will become more common; AEMO estimates this will occur for at least 30% of the time in FY2026 (following the planned retirement
of the Eraring Power Station, dark green line) and 100% of the time by FY2028 (following the anticipated retirement of Vales Point Power
Station, light green line).31

16
Number of coal units online

14

12

10

0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of time coal units online
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Minimum coal unit combination (or equivalent)

Figure 17: Number of coal units projected online under Step Change scenario in NSW32

In the operational timeframe, if there aren’t sufficient synchronous generators online to provide system security services, AEMO must intervene
to keep the grid secure. This can include directing generators (or loads) to operate in a certain way to deliver essential services, or directing
Network Service Providers to return lines or elements to service. Yet as Figure 17 shows, in the coming years there may not be sufficient
synchronous generators available. New replacement capacity is urgently needed.

Power Station in NSW).

31. AEMO, 2022, System Security Reports, https://aemo.com.au/en/energy-systems/electricity/national-electricity-market-nem/
nem-forecasting-and-planning/system-security-planning
32. AEMO, 2022, System Security Reports

18 System Security Roadmap

 The power system is operating within a secure operating envelope when technical
parameters of the power system are maintained within defined limits, such as voltage,
frequency, current, power quality and fault levels. These technical limits are necessary
to keep the power system safe and secure.

Key system security terms include:

System strength: the power system’s ability to maintain and control the voltage waveform at any given location in the power system,
both during steady state operation and following a disturbance.33 A power system with inadequate system strength risks instability and
supply interruptions. In a system with low system strength:34
• Generators may be unable to remain connected during disturbances;
• Control of the system voltage becomes more difficult;
• Protection systems that ensure safe network operation may not operate correctly.
High system strength improves our grids resilience to disturbances. If there’s a fault or unexpected change on the grid, the voltage
waveforms won’t change much and will recover quickly, allowing us to operate our power system safely and stably with minimal impact
to energy consumers.35

High system strength Low system strength

fault fault

Figure 18: The difference in voltage waveforms during and after a fault, for systems with high and low system strength (stylised representation) 36

Inertia: the immediate, inherent, electrical power exchange from a device on the power system in response to a frequency
disturbance37, caused by a sudden unbalance of supply and demand. Following a sudden disturbance, the inertia of the power system
helps slow down the Rate of Change of Frequency (RoCoF), helping to stabilise the power system and reduce the risk of cascading
disconnections. Cascading disconnections are possible if the frequency of the power system deviates significantly from its normal
50Hz value.
Voltage stability: the ability of the power system to maintain or recover voltage magnitudes to acceptable levels following a
contingency event38, ensuring the system doesn’t enter voltage collapse.
In addition to the system security terms defined above, there are other additional forms of security and stability which needs
to be carefully planned for and managed, including transient stability, oscillatory stability, control system stability,
frequency stability and power quality.

33. AEMO, 2022, System Strength Requirements Methodology and System Strength Impact Assessment Guidelines
amendments consultation, https://aemo.com.au/consultations/current-and-closed-consultations/ssrmiag
34. AEMO, 2022, System Strength Requirements Methodology and System Strength Impact Assessment Guidelines
amendments consultation, https://aemo.com.au/consultations/current-and-closed-consultations/ssrmiag

35. AEMO, 2020, Energy Explained: System Strength, https://aemo.com.au/learn/energy-explained/energy-101/energy-ex-

plained-system-strength
36. AEMO, 2020, Energy Explained: System Strength, https://aemo.com.au/learn/energy-explained/energy-101/energy-ex-
plained-system-strength
37. AEMO, 2023, Inertia in the NEM explained, https://aemo.com.au/-/media/files/initiatives/engineering-framework/2023/
inertia-in-the-nem-explained.pdf?la=en
38. AEMO, 2023, Power system stability guidelines, https://www.aemo.com.au/-/media/files/electricity/nem/security_and_re-
liability/congestion-information/2016/power-system-stability-guidelines.pdf

System Security Roadmap 19

2.3. Resolving system strength is key to enable 100% instantaneous renewables
System strength provision is essential for the safe and secure By mid-2025, following the planned retirement of the Eraring
operation of the power system. Gaps in system strength will be one Power Station, NSW is projected to have periods without enough
of the first, and most significant, challenges for Transgrid to resolve. synchronous generating units online to keep the power system
As system strength gaps emerge, Transgrid must put in place new operating safely.
technologies and services to diversify and decouple system strength Analysis in Figure 19 shows that this ‘shortfall’ will grow as coal
services from the operation of thermal generation units. Only generators progressively retire, becoming four times larger once
with sufficient system strength services from non-thermal assets all coal retires from NSW (the gap between the coloured bars and
(i.e., not from coal or gas) will the grid be able to operate at 100% the minimum requirements in black). Much of the remaining system
instantaneous renewables. strength that NSW can rely on will come from interstate, as a function
Our analysis suggests that the technologies that resolve system of other states meeting their own system strength requirements.
strength can also (with relatively minor adjustments) help meet
requirements for inertia and voltage control – making system
strength a pivotal service on which to focus.

9,000
Fault level (MVA)

Minimum fault level requirements (MVA)

8050 MVA
8,000
7100 MVA
7,000
Interstate contribution
6,000

5,000 NSW contribution

4,000

2800 MVA
3,000

1800 MVA
2,000

1,000 600MVA

0
Armidale Newcastle Wellington Sydney West Darlington Point
NSW system strength node
Current trends post Eraring Power Station exit Additional coal generator retirement No thermal Post-contingency minimum fault level Shortfall

Figure 19: System strength provision in NSW to meet minimum post-contingency fault current requirements as coal units retire

In addition to providing the minimum amount of system strength to keep the power system safe, new renewable energy deployments must
be matched by an equivalent growth in new system strength services. More than 20GW of new largescale inverter-based renewables will be
connected in NSW by FY2033. This is projected to grow to 46GW of largescale renewables by 2050.

7,000
Forecast inverter based renewables (MW)

6,000

5,000

4,000

3,000

2,000

1,000

0
Armidale Buronga Darlington Point Newcastle Sydney West Wellington
Utility-scale solar Wind Battery storage Hydro

Figure 20: 10-year forecasts of inverter-based renewables projected to connect surrounding system strength nodes in NSW, under AEMO’s 2022 Step
Change scenario

20 System Security Roadmap

 A new regulatory approach to solving for system strength
From 2 December 2025, a new system strength framework will begin under the NER, requiring Transgrid to deliver system strength
on a forward-looking basis to standards set by AEMO. Under this framework, system strength will be effectively ‘unbundled’ from the
operation of the energy market. Transgrid will be required to establish a portfolio of solutions to ensure minimum system strength
requirements are met in full at all times of the year. This is a departure from the existing ‘Fault Level Rule’, where only the ‘Shortfall’
or gap in NSW’s system strength has to be filled.
In addition, Transgrid is required to deploy system strength solutions above the minimum levels to facilitate the stable connection
and operation of renewables as they come online in NSW in the coming years.
The conceptual diagram below articulates how Transgrid’s system strength obligations will change from 2 December 2025.

Efficient level of system strength

(optimised in real time in response to
the dynamic requirements of renewables)

Transgrid must fill a

system strength Transgrid must have a
shortfall (MVA) as portfolio of solutions to
specified by AEMO ensure a stable voltage
from July 2025 Minimum fault level waveform of connecting
requirements inverter-based
(MVA)
renewables
Shortfall
System strength requirements

A portfolio of network
and non-network Transgrid must have a
Contribution from solutions (which can portfolio of solutions to
synchronous include contracts with meet minimum fault
generators existing synchronous level requirements
dispatched in the generators) (MVA) at all times,
energy market which can include
generators dispatched
in the energy market

Existing fault level rule System strength rule change

(until 1 December 2025) (from 2 December 2025)

Figure 21: Transgrid‘s evolving responsibilities for meeting system strength requirements in NSW (conceptual)

System Security Roadmap 21

Figure 22 shows the combined requirements for system strength remediation in NSW in the next decade: meeting the minimum levels
of system strength in full (grey bars) plus additional system strength to support the stable connection and operation of new renewables
(coloured bars). As the figure shows, significant system strength is required in the next decade surrounding the Newcastle and Sydney
West population and load centres, and surrounding Wellington (Central West REZ) and Armidale (New England REZ).

9,000
Three phase fault level (MVA)

8,000 Indicative fault level requirements

to keep new connecting
7,000
renewables stable (MVA-proxy)
6,000
5,000 Minimum three phase fault level
requirements (MVA) must be met in
4,000 full from 2 December 2025
3,000
2,000
1,000
0
Armidale region Buronga region* Darlington Point region Newcastle region Sydney West region Wellington region

FY25 (minimum requirements) FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33

Figure 22: NSW’s system strength requirements projected for the coming decade, measured in three phase fault level equivalent

2.4. A diverse range of system strength solutions are available

Transgrid expects to meet its new obligations using a diverse range The retirement of coal generation and the growth in grid-following
of existing and novel system strength solutions. We intend to form renewables will require a significant deployment in system strength
a portfolio of solutions to best meet power system requirements at infrastructure and services. Our analysis suggests that in the next
the lowest costs to consumers, through our RIT-T process. The range 10 years, the equivalent of up to 21 large 200MVA synchronous
of possible technologies and services we are considering for this condensers will be required to provide sufficient system strength
portfolio include: support to NSW, with an indicative cost of $2.2 billion. While these
• Existing synchronous generators dispatched in the energy requirements are presented as new synchronous condensers-
market, such as coal, gas and hydro. Contributions from equivalent, Transgrid believes that a mix of different technology
these sources are expected to decrease over time as thermal solutions, including existing synchronous generators, will best meet
units retire. the needs of the power system at the lowest cost to consumers.
• Services outside the energy market, such as existing Our analysis explored the range of technologies that could contribute
synchronous hydro units that may be able to operate in to meeting NSW’s system strength requirements, including
‘synchronous condenser’ mode, or generators considering technologies that provide system strength as a function of their
converting coal units into synchronous condensers. operation within the energy market. As compared against minimum
system strength requirements at Newcastle, Figure 23 shows:
• Synchronous condensers, which are synchronous motors that
spin freely (with no fuel combustion or power generation), used • The growing gap in system strength provision from coal
for the purpose of providing system security services. generators as they progressively retire;
• Emerging technologies, such as batteries, STATCOMs or • A range of potential solutions that could meet part of the need,
renewable generation with grid-forming inverters. Grid forming including synchronous condensers, hydro units operating in
inverter technology has significant potential to provide synchronous condenser mode, a conversation of an existing coal
system strength support, in addition to other grid supporting generator to synchronous condensers, grid forming batteries,
services such as synthetic inertia, fast frequency response Snowy 2.0 and grid forming renewables;
and voltage support. • No individual solution is large enough to meet the need on its
own, and a portfolio of solutions will be required to meet the need
for system strength in NSW.

An overwhelming market response for system strength services

Transgrid’s recent Expression of Interest process for non-network solutions to provide system strength resulted in almost 70 potential
technology solutions. This included more than 10GW of existing or conversions of existing synchronous generators, a pipeline of 10GW of
innovative grid-forming batteries and 5GW of other new generation and energy storage projects, including pumped hydro and gas.

22 System Security Roadmap

 Pre-contingency minimum level Efficient level (FY33)
Interstate Eraring
contribution retires Vales Point retires Bayswater and Mount Piper retires
System strength
Support renewables
need in NSW
Interstate
contribution Synchronous condensers (x21 across NSW by FY33)
Synchronous
condensers

Gas Hydro Snowy 2.0

Energy market A combination
Grid forming renewables of solutions are
Hydro in synchronous (0.5GW) required to
Coal conversion condenser mode meet the need
Non-market
Snowy 2.0
Grid forming batteries
(2GW)
0 2,000 4,000 6,000 8,000 10,000
Fault level (MWA)

Figure 23: Possible solutions available to meet minimum post-contingency fault level requirements at the Newcastle system strength node as coal generators retire

Transgrid has commissioned economic analysis to explore the costs and benefits of installing new system strength solutions (such as
synchronous condensers), versus relying on existing synchronous generators in the energy market (such as coal, gas and hydro), where
possible, to meet gaps in system strength.
Results show that proactively investing in new system strength infrastructure or services in NSW will significantly lower costs for consumers,
with a net economic benefit of $2.9 billion to FY2042. This would rise to $3.3 billion if one coal generator was to unexpectedly exit the market
two years earlier than planned.39
The alternative to this investment is for existing gas units to run more frequently to cover gaps in system strength in NSW, with very high
operating costs (and greenhouse gas emissions), leading to higher overall costs for consumers.

System strength shortfalls in South Australia

To fill the declared system strength gap in South Australia, ElectraNet commissioned four large high-inertia synchronous
condensers in 2021. In the first full quarter following installations, the four synchronous condensers have:
• Reduced the cost of market interventions from $37 million to $7 million, delivering $30 million in savings to consumers in just
3 months. First quarter savings of $30 million indicate that the synchronous condenses could pay for themselves in 1.5 years
(on a $185 million capital cost)40
• Reduced the required number of gas generators to be operational from four to two (and recently reduced them to just one
in certain situations)
• Enabled generation limits to increase, unlocking an extra 800MW of renewable generation capacity

39. Modelling undertaken in 2023 by Endgame Economics for Transgrid

40. AEMO, 2022, Quarterly Energy Dynamics Q1 2022

System Security Roadmap 23

2.5. Inertia and voltage support requirements follow a similar path
Just like system strength, shortfalls in inertia will grow and voltage issues will become more common as coal generators retire. To keep the
power system safe and secure, Transgrid must solve both needs.
Figure 24 highlights inertia levels in NSW following the retirement of the Eraring Power Station, following a subsequent coal generator
retirement and after all coal has retired in NSW. Transgrid must plan to ensure that inertia remains above the secure level.

14,000
NSW system inertia (MWs)

Secure level of inertia

12,000

10,000

8,000

6,000

4,000

2,000

0
Current trends post Post Vales Point No coal
Eraring Power Station retirement retirement

Figure 24: Inertia levels in NSW against minimum requirements as coal generators retire

The NSW transmission system is already seeing high voltages on transmission infrastructure during periods of high renewable generation and
low demand, which must be actively managed. As renewable penetration increases, high voltages (and large step changes in voltage) requires
remediation or they will begin to breach levels specified to ensure a safe and secure power system. During minimum demand periods, low
voltage issues are projected to occur surrounding load centres. Figure 25 highlights locations of voltage violations in a grid operating at 100%
instantaneous renewables, without remediation.

NSW

132 kV line
220kV line
ACT 330kV line
500kV line
Buses with high voltage violation
Buses with high voltage step-change violation
Buses with low voltage step-change violation

Figure 25: Locations of unmitigated voltage issues if the NSW power system is operating at 100% instantaneous renewables

24 System Security Roadmap

2.6. A co-optimised approach to meeting system security needs
Co-optimising different technology solutions to meet inertia, system strength and voltage needs will lower the total cost to consumers. Many
solutions for system strength can also solve for inertia and voltage support at minimal additional cost. For example, synchronous condensers,
which provide system strenght and voltage support, can be fitted with flywheels to also provide inertia at low marginal cost. Adding grid forming
capabilities to batteries, which primarily involve software changes, could enable them to provide system strength and inertia at the same time as
other services.
Figure 26 shows a raft of possible solutions (including those modelled in Figure 23 for system strength) that could solve future inertia gaps.

Minimum inertia requirement Secure level of inertia

Eraring
retires Vales Point Bayswater and
retires Mount Piper retires
Inertia need in NSW
(islanded)
9x synchronous condensers
with flywheels (NSW-wide)
Synchronous
condensers

Gas Hydro Snowy 2.0 A combination

Energy market of solutions is
required to
Coal Hydro in synchronous Grid forming batteries meet the need
conversion condenser mode (2GW) Snowy 2.0
Non-market

0 5,000 10,000 15,000 20,000 25,000

NSW inertia (MWs)

Figure 26 possible solutions available to meet NSW’s inertia requirements as coal generators retire

2.7. A promising role for grid-forming inverters in supporting power system security
Grid forming batteries hold significant promise for both inertia and Edify Energy’s grid forming battery at Koorangie in Victoria to
system strength support, in addition to other value streams they are provide services to strengthen the grid. Transgrid is undertaking
already known to offer. detailed power system modelling to assess whether, and how many,
Through its Wallgrove Grid Battery project, Transgrid is already grid forming batteries would be required to help stabilise grid-
trialling the use of a 50MW/75MWh lithium-ion battery to provide following renewables.
synthetic inertia services to the NSW transmission network. Wallgrove Because all of Australia’s existing wind and solar generators are grid-
is not alone; the Hornsdale Power Reserve in South Australia also following, they need system strength to support their operation. Using
provides synthetic inertia, and the Torrens Island battery is currently grid-forming inverters on renewable plants themselves hasn’t been
the largest grid forming battery in the world. done before in Australia, but could offer an exciting opportunity to
Grid forming batteries are yet to be field-tested for system strength reduce the need for additional system strength support, representing
provision, but initial analysis indicates that this technology could a step change in the provision of power system security.
make a positive contribution. AEMO has recently contracted with

What is a grid forming battery?

• Most grid scale batteries today are equipped with grid-following inverters, which track and ‘follow’ the grid’s voltage reference. When
the voltage waveform is distorted, particularly in areas of low system strength, grid following inverters are prone to unstable behaviour
(just like grid-following renewables)
• Grid-forming, or advanced inverters, set their own internal voltage waveform reference and can synchronous with the grid or operate
independently of other generation41. Grid-forming batteries are expected be able to provide essential system stability services that
strengthen the grid by increasing the stability of the voltage waveform.
• This technology has significant potential, but more studies and real-world tests are required to assess and validate their potential.
ARENA is currently supporting the rollout of eight grid scale batteries with advanced inverters, representing 2GW / 4.2GWh of capacity.
This represents a tenfold increase in grid forming battery storage capacity across the NEM.42

41. AEMO, 2021, Application of advanced grid-scale inverters in the NEM

42. Source: ARENA, 2022, ARENA backs eight big batteries to bolster grid, https://arena.gov.au/blog/arena-backs-eight-big-bat-
teries-to-bolster-grid/

System Security Roadmap 25

2.8. Ongoing analysis is required
Transgrid and the broader industry must undertake further research As the proportion of renewable energy sources in the grid increases,
and analysis to understand the full implications of operating the power quality issues, such as harmonics, steady state voltage
grid at up to 100% instantaneous renewables. For example, we violations, and voltage flicker are expected to become more
need to assess the risk of other stability issues outlined in the ‘key prevalent. Transgrid, AEMO and other Network Service Providers
system security terms’ box on page 19, such as large-disturbance must continue to thoroughly assess and rectify potential power
instability and small signal instability. Not only will new solutions for system security gaps as the grid transitions to renewables.
system security be required, but the control system parameters of
the remaining synchronous generators (such as coal, gas and hydro
units) may need to be re-tuned.

26 System Security Roadmap

Pillar 3:
Operability
Pillar 3: Operability
Planning and operating a more complex These unprecedented technology and operational changes (and their
occurrence in such a condensed timeframe over the next decade)
power system are making it more challenging for Transgrid to plan, manage and
operate the NSW power system, and increase operational risk.
“Uplifts are needed in real time monitoring, power Managing the increased complexity of the NSW power system is not
system modelling, and control room technologies a future problem. The system is already more dynamic, unpredictable
by AEMO and Network Service Providers, to ensure and is sitting closer to the edge of its secure operating envelope.
operational staff have the tools to maintain secure Transgrid’s existing operational tools and capabilities are now at full
operation of the NEM power system as it transitions capacity.
to significant penetrations of inverter-based
resources including Distributed Energy Resources”. 3.2. Transgrid’s role in operating the
AEMO, 2022 Integrated System Plan NSW transmission system
Over the next decade, an investment by Transgrid of $140 million will As a Transmission Network Service Provider (TNSP), Transgrid is
be needed to build new operational technology tools and $16 million responsible for the safe, efficient and reliable planning, management
per year to increase our staffing levels and training to facilitate the and operation of the NSW transmission system.
safe and secure transition of NSW’s electricity system. We perform studies for real-time, next-day, next-week, next-month
To 2033, investment in operability is projected to represent 0.2% of operations and plan for operations and investment many years
total electricity system spending in NSW, including on generation, into the future.
storage, system security, the distribution network and consumer
Our control room is constantly monitoring and interacting with
spending on distributed energy resources.
transmission equipment, with generators and our direct-connected
Investing in operability uplift is projected to deliver over $4 in customers including distribution network operators. Operators are
benefits to consumers for every $1 spent by ensuring grid operators remotely activating and deactivating transmission equipment to
are equipped to deal with emerging challenges, and avoiding ensure that power flows are stable, operating limits are not exceeded,
disruptive and costly power outages that may otherwise occur. and that sections of the grid are isolated for maintenance and the
connection of new infrastructure, including renewable generators and
3.1. Driving complexity in the NSW storage.
power system With an eye on the immediate future, we manage system security on
the transmission subsystem (132kV lines) and ensure the reliability
A grid operating at 100% instantaneous renewable energy is a
of the high voltage network is not compromised by planned and
fundamentally different system to plan for, operate and manage.
unplanned equipment outages. We must coordinate with the market
Driving this increase in complexity over the coming decade in
operator to ensure that generation is dispatched only where the
NSW is the:
transmission network can support it – communicating changes in the
• Accelerated retirement (and reduced operation/availability) of operating envelope of the transmission network to AEMO so they can
over 7GW of coal generation capacity, reducing the share of appropriately dispatch generators.
synchronous thermal generation from 68% today, to 17% in 2033.
We maintain our transmission assets over their entire life cycle,
• Tripling of the proportion of generation expected to be provided ensuring that the network can deliver exceptionally high reliability
from intermittent renewable sources, including the connection of and safety. This involves constantly monitoring equipment for
17GW of new large scale renewable generation and storage to the changes in operational behaviour and assessing and planning for
transmission system. asset maintenance and renewal.
• Integration of at least five renewable energy zones under With an eye even further ahead, we ensure that generators being
the NSW Electricity Infrastructure Investment Act 2020, added to the system are set up where and with operating parameters
including interfaces with multiple renewable energy zone that the system can reliably and securely support and in anticipation
Network Operators. of developing transmission needs.
• Delivery of a significant program of major transmission projects, Transgrid collaborates with AEMO, NSW Government, EnergyCo,
including the requirement to take prolonged system outages NSW distribution networks and other transmission network
for construction. service providers in adjacent jurisdictions to plan the needs of the
transmission system to support forecast changes in generation and
• Almost tripling in capacity of rooftop solar, reducing minimum demand many years in advance in order to facilitate the energy
demand levels and significantly increasing reverse power transition for the benefit of our consumers.
flows from the distribution to transmission network.
• On-boarding of new technologies with limited historical data
and knowledge of operating performance, including grid-forming
batteries, SmartValve technology and compressed air systems.

28 System Security Roadmap

 Transgrid and AEMO work together to monitor and control the transmission system
Operation well within the secure operating envelope provides stability and reliability. Only security measures of last resort
– trips or breakers – are automatic
Transgrid advises AEMO
AEMO uses the VAR
of changes to network
Dispatch System to
operating constraints
instruct Transgrid to
control assets on the
mains network AEMO monitors AEMO:
operating conditions on coordinates
the 220kV – 500kV dispatch of
mains network generation

Transgrid: Transgrid monitors

operation of operating conditions
on the mains
transmission
network and 132kV Transgrid may work
asset control
sub network* directly with renewable
generators to avoid
Transgrid controls assets exceeding system
on the 132 kV sub strength parameters
network during outages
*The Transgrid control room monitors the entire network but only intervenes on the mains network without AEMO direction in emergency situations

Figure 27: Transgrid and AEMO’s overlapping roles for system operations

3.3. A complex network operates closer to the edge

Operating the NSW power system as it transitions towards 100% instantaneous renewable power is resulting in a grid that is sitting closer to
its limits for stability and security. This requires more scrutiny from operators who must intervene more often to restore redundancy or be
prepared to take rapid action on multiple network assets in the event of an unplanned outage.
Transgrid has already observed that the NSW power system is sitting closer to the edge of its secure operating envelope. This means the
system is more likely to tip into insecure operating conditions if a credible contingency occurs. Realtime contingency analysis running in
our control rooms shows the times that the loss of a generator or transmission system asset would result in a violation of the power system
technical envelope. Figure 28 shows the trend of the contingency analysis results since 2010, where a sharp rise in possible violation events can
be seen since the start of this decade – a trend that is projected to continue as the energy transition gathers momentum.

5,000
Number of intervals

4,000

3,000

2,000

1,000

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Early 0000-0600 Morning 0600-1200 Afternoon 1200-1800 Evening 1800-2400 Rolling 7-month average

Figure 28: Operating intervals (5 minute granularity) per month when at least one credible contingency on the NSW transmission system would have resulted in
a violation of the power system technical envelope, with a simplified trend overlayed

System Security Roadmap 29

 We can see evidence of the growing complexity involved in operating the transmission system.
Between
2015 & 2023

 9 to 41  4,000 to 11,000
Increase in Generator Operators Increase in Data Monitoring
interfacing with our control room Devices across the network

 18,000 to 36,000  101 to 184

Increase in generator connections,
Increase in Alarm Monitoring Points distribution network connections and
substations connected to our network

3.4. New connections and system planning require intense scrutiny

For every large coal generator decommissioned, around 20 new wind farms would need to be connected to replace the equivalent energy
output. Each new connection and major transmission project requires significant network analysis, planning, energising, testing and
commissioning. This work is essential to ensure new generators and transmission assets can meet performance standards, and the power
system can operate securely with them online under a range of different conditions and scenarios.
Over the past two years Transgrid has seen a rapid rise in the number of new connection applications across NSW. This will only accelerate with
the NSW Government’s plans for an additional 12GW of largescale renewable generation capacity to be connected by the end of this decade.

Annual connection applications Generation capacity (MW)

2148

2
2000
2
784
5
2
2
2 930

2019 2020 2021 2022 2019 2020 2021 2022

Utility-scale storage Hydro Utility-scale solar Wind
Figure 29: Connection application volumes (number of applications and capacity) in NSW between 2019-2022

The complex and unpredictable interactions of inverter-based resources – wind, solar and battery storage – coupled with the growing number
of elements in the network are driving the need for increasingly sophisticated and time-consuming analysis to be undertaken. New generation
facilities are being constructed in much shorter timeframes than traditional thermal generators. As connection applications grow, the team and
tools to undertake detailed analysis must be scaled to meet the demand.

30 System Security Roadmap

3.5. Asset management and operation is a delicate balance
Managing transmission assets is not a standalone process. The planned outages required to maintain existing assets and facilitate the
connection of new assets must be coordinated with real-time network reliability and security needs. Outages for maintenance can only take
place when there is enough redundancy in the network. Spare dispatchable generating capacity is shrinking as coal generators retire, limiting
the buffer that the power system has to take planned outages. More dynamic and weather-dependent power flows also reduce the windows of
high redundancy for outage planning.
In addition, the dynamic operation of the power system is changing the way our assets are used. Greater largescale renewables, declining
minimum demand and increased morning and evening ramping are resulting in greater switching of network equipment, such as capacitor
banks and reactive plant. Greater switching accelerates asset fatigue.
As operating patterns change, and new equipment enters the system, effective asset management will require new capabilities, including uplifts
in real-time and predictive monitoring.

3.6. Capability and capacity gaps as we approach 100% instantaneous renewables

A complex energy system needs modern tools and skills. The growth in complexity is leading to capability and capacity gaps within Transgrid –
gaps that must urgently be addressed if we are to continue to safely and securely operate the NSW power system. Current issues include:
• Limited visibility of real-time power system conditions and limited predictive look-ahead forecasting is creating incomplete system
information on which to base operational decisions. This will become ever more problematic as the system becomes more dynamic, with a
growing share of intermittent renewable generation.
• Limited capability to manage the complex system outages required to facilitate the construction and commissioning of large volumes of new
generators and transmission infrastructure. This capability is essential to support urgent new connections to the transmission network.
• Difficulty in scaling power systems analysis and planning studies to the volumes required to connect very large numbers of new
renewable projects to the transmission system. This capability is also required to effectively plan for power system security as
coal generation withdraws.

Modelling
and analysis
Taking
Increased need for longer
uplift in analysis
capabilities to support
long, medium- and
short-term planning, Increased outages
forecasting, outage
planning and asset
management
Increased connections

Complex network models

COMPLEX OPERATIONS

Variable generation

Complex generator interactions

Needed
faster Real-time
Variable load decision support
Increased need for
analysis of system
conditions in real-time
and for look-ahead
analysis to support
operations

Figure 30: The growing complexity of the power system is driving capability gaps

System Security Roadmap 31

To play our part in the clean energy transition, Transgrid must have the appropriate systems and skills to plan for, manage and operate the
increasingly complex NSW power system. Failing to invest in these capabilities poses unacceptable risks to reliable and secure operation of the
transmission network. In addition to delays in generation connection and more conservative operating limits constraining generation dispatch
(see 1.2 The Cost of Congestion), failing to uplift capacity and capability could result in greater risks of supply losses.
Expert analysis and advice to Transgrid suggests that, without an uplift in operational capabilities and capacity, the compound effect of
increased complexity will lead to a more than five-fold increase in the risk of lost load due to operability incidents on the NSW transmission
system by 2030. In addition to more frequent localised events, the chance of an extreme system black event, similar to what was experienced in
South Australia in 2016, could rise. Such outages, even when localised, are not just inconvenient but represent safety issues for customers and
ultimately real economic costs.
The good news is that the benefits to consumers of preventing these outages with uplifts in operational technology tools and increased
headcount and training will outweigh the cost of the uplift by a factor of 5.

Inverter-based resources: sophisticated power for the future

Inverter-based resources such as batteries, solar and wind generators have sophisticated interactions with power networks. They can
be tuned to provide all manner of system security services such as fast response reserves, frequency inertia and system strength
required to keep the grid stable and operating reliably. The technology of inverters today is such that the provision of these crucial
services can be provided as needed for local grid conditions and this is why some are referred to as grid forming (see page 26).
However, unlike truly synchronous generators that are self- and grid-stabilising within normal operating parameters, inverter-based
resources are highly sensitive to grid conditions. This is especially true for the grid-following devices that make up the vast majority
of current and future renewable resources. Rather than inherently stabilising disturbances in the grid, these devices are susceptible to
larger changes and respond by disconnecting or reducing power for safety. Depending on grid conditions, this can have a stabilising or
amplifying effect on disturbances.
When grid conditions change rapidly, the response of individual resources can vary wildly due both to grid topology and variation in
generation due to weather. It is thus a much more complex operational process to ensure that small instabilities do not cascade into
larger problems for the power system: unexpected responses can have significant consequences.
Like any highly sophisticated machine, the possible product is both more powerful and refined, but also requires a greater level
of understanding and skill to achieve.

32 System Security Roadmap

System Security Roadmap 33
Learnings from other countries and research institutions
Maintaining operability is essential for reliable and secure power system operation.
Transgrid’s high standards for operation mean that NSW has not had to endure a major power system outage to date, however recent incidents
around the world have highlighted the need for improved control capabilities and situational awareness for managing power networks as
renewables are added, to handle very large volumes of data and far more complex situations.
The 2020 State of Reliability study by the North American Electric Reliability Corporation (NERC) noted that every major outage since
the 1960s in the United States was at least partially due to a lack of operability in the form of situational awareness or operations
decisions making.43

Recommended
Catastrophic event Consumer impact Escalating factors capability and capacity
US – 2003 • 50 million people • Lack of situational • Improve situational awareness
North-East Blackout44 affected and 61.8GW of awareness due to • Implement real-time
Network operators did not recognise generation lost inadequate operating applications for wide-area
deteriorating system conditions under • Took 4 days to restore in procedures, tools and system monitoring
routine contingency situations for some parts of the US communication between
• Improve system modelling
outages. operators
• Estimated cost to the data and data exchange
When parts of one transmission network US of $4-10 billion • Ineffective visualisation of practices between network
began to trip automatically for protection, and $2.3 billion in lost power system conditions operators
lack of planning and procedures and manufacturing to Canada. across control areas
• Increase support and tools
information mismatch with generation and • Training deficiency of for decision making in
interconnected network operators lead to operators. operations.
ineffectual control actions and cascading
protection trips across interconnected
and interdependent networks.
US – 2011 • Cascading outages left • Due to inadequate • Improve real-time tools
Arizona- California Outages45 2.7 million customers operations planning and to support monitoring of
During planned maintenance, the system without power during real-time situational potential contingencies
was operating without redundancy. The rush hour, some for up to awareness, the that could affect reliable
loss of a single 500kV transmission line 12 hours. transmission system was operations
at this time initiated the event. Resultant not being operated in • Improve communications
flow redistributions, voltage deviations, a N-1 state required to among network operators
and resulting overloads had a ripple prevent cascading outages to maintain situational
effect, as transformers, transmission lines, in the event of a single awareness
and generating units tripped offline and contingency.
• Ensure network operators
initiated automatic load shedding. have adequate real-time tools.
UK – 2019 • Over 1 million people • Some generators failed • Review and improve grid
Ofgem Outage46 were affected to meet their license and standards and planning
A lightening strike caused a routine • Most significant impacts code requirements processes for test compliance
fault on the transmission network, seen on the rail sector • Two distribution networks to grid codes
disconnecting a number of small • System was restored in reconnected customers • Improve real-time visibility of
generators connected to the distribution 45 minutes. before receiving required distributed generation
network. Two large generators instructions from the • Improve processes and
experienced technical issues and Electricity System procedures for managing
failed to provide power to the system, Operator, jeopardising system operation in highly
resulting in a large frequency dip that recovery of the system. complex and changing
caused large volumes of distributed conditions.
generators to disconnect. Combined
power losses exceeded backup power
generation capacity.

43. NERC, 2020, State of Reliability

44. https://www.energy.gov/oe/articles/blackout-2003-final-report-august-14-2003-blackout-united-states-and-canada-causes-and
45. https://www.nerc.com/pa/rrm/ea/Pages/September-2011-Southwest-Blackout-Event.aspx
46. https://www.ofgem.gov.uk/publications/investigation-9-august-2019-power-outage

34 System Security Roadmap

Advice from recent local and global innovation and research efforts to improve the operation of power systems during the energy
transition include:

US – NERC: State of Reliability • Situational Awareness is necessary to maintain reliability, anticipate events and respond appropriately
202047 when or before events occur.
• A lack of appropriate tools and data compromising situational awareness impacts operator decision
making and thus system reliability.

US – FERC and ERO Real Time • Significant changes to power systems are not being reflected in the collection of real-time data,
Assessments adversely affecting situational awareness.
202148 • Increasing complexity is straining the ability of system operators to complete real-time assessments.

Europe – ENTSO-E • Important operations innovation includes enhanced integrated Phasor Measurement Unit (PMU)
Research, Development usage for Wide-Area Monitoring and improved situational awareness and the development and
& Innovation Roadmap training of AI-based decision support systems to leverage increased data.
2020 – 2030 • Transmission system operators must devote resources to innovative grid design and solutions as well
202049 as new asset management approaches, including the use of sensors, the Internet of things, satellites,
advanced robotics and applied machine learning for predictive asset management.

AUSTRALIA – CSIRO • As a result of transformational change, the existing systems in the control room of 2021 will not be
(for G-PST) adequate to manage the system of the future. The way the system is operated, and the way power
Control Room of the Future system operators interact with the system, will have to adapt at a rapid pace.
Research Roadmap50 • Significant risks to the system posed by inadequate situational awareness, deficient decision-making
support and cognitive overload of staff are difficult to quantify. Tasks should be automated where
possible, but automation is not a panacea for operator situational awareness.

47. NERC, 2020, State of Reliability

48. FERC, 2021, FERC and ERO Enterprise Joint Report on Real-time Assessments
49. ENTSO-E, 2020, Research, Development and Innovation Roadmap 2020-2030
50. CSIRO, 2021, Australia’s Global Power System Transformation (G-PST) Research Roadmap

System Security Roadmap 35

3.7. Transgrid’s plan for deploying new operational technology tools
Like other transmission operators around the world, Transgrid needs new operational technology tools to continue to plan and operate a secure
power system that is accelerating towards 100% instantaneous renewables. We must adapt and evolve our processes, skills and tools to better
manage growing system complexity.
Transgrid has already begun the process to deploy 25 phasor measurement units, or PMUs, to assist network visibility. These high-speed
streaming devices can detect oscillations and phenomena in power systems that existing SCADA systems cannot. High-speed monitoring
devices that improve data collection from the power system such as these are just a start, additional tools are required to turn new and
improved visibility into improved awareness and control.
Transgrid has identified a suite of essential operational technology tools. This suite will provide an uplift that aligns with AEMO’s own
Operations Technology Roadmap51 and Engineering Framework and is consistent with the experience of system and market operators globally.
The core suite of tools essential for Transgrid to plan, manage and operate an increasingly complex power system fall into two groups:

Digital twin modelled representation of Situational awareness and real-time

the physical system decision support
 Single network management model  Alarm analytics
 Asset registration  Advanced forecasting
 Data governance and calculation platform  Advanced neural net state estimate
 Asset health decision support  Visualisation and operations decision support

3.8. Digital twin: an advanced modelled representation of the physical

power system
Digital twin technology is essential to improving network planning, asset management, outage and fault management and network operations
in a complex power system. A digital twin is a digital replica of the power system’s physical assets, processes and systems that can be used for
simulation and modelling. When used in combination with sensor data, a digital twin supports real-time diagnostics of operational anomalies,
understanding of system health and improved system efficiency.
Digital twins can provide asset managers, planners and control room operators with critical information that enables them to understand
current and evolving system conditions and make decisions at the speed necessary to securely operate an unpredictable and intermittent
power system. These tools allow operators to understand the network’s rapidly changing risk profile and identify where solutions could be
effectively deployed in the future.
By incorporating and using high quality data governance and ‘single point of truth’ data models, digital twins help to expose gaps and
relationships between asset performance, network plans and system operator actions. This allows multi-criteria decision-making and enables
users to test and model options and important trade-offs across operations, planning and asset management.
Digital twin: modelled representation of physical system
Single Network Management Model • Centralised ‘As-Built’ and ‘Future State’ models
Improved management of data models • Tracks and maintains model histories
• Provides standardised models suitable for internal and external sharing
Asset Registration • Provides workflow functionality for the registration processes.
Simplifies and streamlines collection of data and • Capture and manage asset data across the entire connection process
manual interactions • Supply data to other systems eg the Network Model Manager and Asset Health
Decision Support
Data Governance and Calculation Platform • Amalgamates disparate data sources across business units and operational functions,
Ensures a ‘single point of truth’ for data such as SCADA, asset information, weather information and forecasts
Asset Health Decision Support • Supports asset management decision making with near real-time asset condition
Improves asset management analysis

51. AEMO’s “Operations Technology Roadmap is required to uplift operational capability to allow AEMO manage the complex system
of the future.” AEMO, 2022, Operations Technology Roadmap

36 System Security Roadmap

3.9. Improved situational awareness and decision support for the Transgrid
control rooms
Substantial power outages happen when grid operators cannot contain and resolve small issues quickly.
Grid control rooms must ensure that the power system operates securely, within a complex technical envelope. This requires situational
awareness and decision support tools to allow operators to anticipate system changes, assess the potential impact on system security and
respond appropriately when or before system events occur.
By giving operators the right tools based on the digital twin, improved real-time network visibility, and with enhanced training, we can reduce
the cognitive load currently being experienced in Transgrid’s control rooms.

It’s like using a paper map to navigate, versus having Google maps telling you
where you are and exactly what’s happening ahead of you – in real time.
Operators will be able to visualise vast volumes of rapidly changing data, enabling faster and more accurate decisions to keep the power
system operating within a secure technical envelope under more complex and dynamic conditions.
More details of the situational awareness and decision support tools required are presented below.

Situational awareness and decision support tools

Alarm Analytics • Triage alarm data to better understand system conditions

Reduce the cognitive load for • Present operators with predictive and prescriptive decision support
operators responding to alarms
Advanced Forecasting • Provides an accurate view of upcoming system conditions across real-time and look ahead
Better forecasting to stay ahead of periods
developing situations • Supports informed decisions to manage the resilience, security, and strength of the power system
Advanced Neural Net State • Rapidly solves power flows in near and real-time through machine learning rather than power
Estimation system modelling
Data driven ‘what if’ analysis on • Provides look-ahead analysis on possible system conditions in future operating periods to support
future network conditions decision making
Visualisation & Operations • Uses analytics to visualise operations data and information in the control room, to assist
Decision Support operational decision making
Improve efficiency and accuracy • Provides a digital knowledge base for operational procedures and feeds an external portal for
of operator analysis, decisions, and customer information such as outage details
actions

Transgrid has assessed the requirements to uplift its operational technologies to manage a more complex and variable energy system. Building
the state-of-the-art tools to support control room operations requires investment in the underlying digital structure. The improved data
modelling and handling capabilities of the digital twin and associated governance outlined above are essential to support greater volumes of
data and more advanced analytical tools. The packages of capability uplift outlined in this chapter are not and/or options; both are required to
operate the NSW power system safely and securely in the coming decade.
A staged investment of $140 million in the next decade is required to ensure our control room operators, planners and asset managers have
the tools needed to continue to effectively plan, manage and operate our power system. This includes capital investment in new tools and
systems, and ongoing operational and licensing costs.

System Security Roadmap 37

3.10. Growing our human capital and capabilities
The transmission system is growing and becoming more complex. We Transgrid requires increased resourcing levels to support NSW’s
must grow in response. rapid energy transition and unlock capacity to:
To date, Transgrid has been managing growing system risks using • Manage a more complex and volatile system using probabilistic
existing teams and resources, however this is not sustainable on an planning and real-time operations
ongoing basis into the future. • Connect a higher volume of renewable generators
New technology and processes are not themselves a solution to • Deliver system reliability and resilience as the grid transitions to
maintaining quality work under the pressures of increased complexity operations at up to 100% instantaneous renewables
and volume. Additional resources, skillsets and training will be
Transgrid estimates that it will need an uplift that will reach
required to support the increasing requirements and complexity
approximately $16 million per year by FY2028 to increase headcount
of network planning, asset monitoring and system operations and
and training. The table below highlights total resources gaps that
to maintain our current quality and speed of work during the clean
must be filled, beyond what is required for just ensuring operability
energy transition.
(e.g. additional connection engineers).

Function Additional human resource requirements Growth in staff numbers

Network Operations Control room operations, outage planning, operations analysis, asset 72 extra staff required by FY2028
monitoring, SCADA management and training uplift

Network Planning Connection studies, subsystem planning, non-network option 52 extra staff required by FY2028
assessments, system security planning, 100% instantaneous renewable
studies and training uplift

Asset Management Digital infrastructure capacity, asset standards for new technology, 34 extra staff required by FY2028
asset management for new transmission line and substation capacity,
outage management analysis and training uplift

Our control room is a case in point for increased training requirements. Expert advice to Transgrid recommends a four-fold increase in training
for control room operators, to enable them manage increased operational complexity, new equipment and use the new tools. This is essential to
maintain system security and reliability. Effective grid operation results in less undelivered energy, increased utilisation of renewable resources,
more efficient use of transmission infrastructure and lower risk of catastrophic system failure.

38 System Security Roadmap

We’re making the clean energy transition possible
The NSW power system is rapidly accelerating towards a renewable As this paper explains, Transgrid must:
dominated grid. AEMO projects that by 2025 there could be short • Accelerate the delivery of key transmission projects to support
periods where there will be sufficient renewable energy generation energy reliability as coal generators retire.
to meet demand, and this will become common by the end of
– This will require $14 billion in investment in the next decade.
this decade.
• Deliver new and essential system security capacity to decouple
To continue to provide safe and reliable power to millions of
system security services from coal generation and keep the power
Australians, Transgrid is proactively preparing for the challenges and
system within its secure operating envelope without fossil-fuelled
opportunities of the clean energy transition. Key insights identified in
generation.
this report include:
– This will require the deployment of $2.2 billion of new system
• It will be technically possible to operate the NSW power system at
security infrastructure (and/or equivalent services) in the
100% instantaneous renewables, so long as the foundational pre-
next decade.
requisites of energy reliability, system security and operability are
in place. These are not negotiable. – System security equipment and services are projected to
represent 1.5% of total electricity system costs in NSW to 2033.
• System complexity is not a ‘future problem’ but is already making
the power system difficult to operate and increasing risks to • Invest in uplifting our operational technology tools, staffing
consumers. levels and training to ensure the continued operability of a
more complex and dynamic power system.
• An urgent acceleration will be required to put these investments
and capabilities in place for when they are needed. Failure to do – In the next 10 years this will require an investment of
so will increase costs for customers and increase risk to reliability. $140 million to uplift our tools and $16 million per year
for people and training.
• A ‘step change’ in organisational capability is required to meet
this challenge in system planners and operators, not incremental – Operability uplift is projected to represent 0.2% of total
evolution. Traditional regulatory frameworks and business electricity system costs in NSW to 2033.
processes are designed for a ‘steady state’ power system and may Delivering on these three essential pillars will enable the NSW
not be fit for purpose to deliver transformational change. transmission system to respond to and thrive in our new energy
• The rapid pace of change and new frontiers will require a focused, landscape, providing clean, reliable and affordable electricity
innovative and flexible collaboration between system planners, to Australians.
operators, market bodies and policy makers to quickly assess and
solve new challenges that emerge, and ensure reliable and secure
electricity supplies in the best interests of consumers.

System Security Roadmap 39

Disclaimer
The System Security Roadmap is prepared and made available by Transgrid solely for information purposes. It is made available on the understanding that Transgrid and/or its employees,
agents and consultants are not engaged in rendering professional advice. Nothing in this document is a recommendation in respect of any possible investment. The information in this
document reflects the projections, proposals and opinions adopted by Transgrid as at 21 June 2023, other than where otherwise specifically stated. Those projections, proposals and
opinions may change at any time without notice. Anyone considering the information contained within this document at any time should independently seek the latest projections,
proposals and opinions.
This document includes information obtained from public sources. That information has been adopted in good faith without further enquiry or verification. The document does not purport
to contain all of the information that AEMO, a prospective investor, Registered Participant or potential participant in the NEM, or any other person or interested parties may require for
making decisions. In preparing this document it is not possible, nor is it intended, for Transgrid to have regard to the investment objectives, financial situation and particular needs of each
person or organisation which reads or uses this document.
In all cases, anyone proposing to use the information in this document should:
• Independently verify and check the currency, accuracy, completeness, reliability and suitability of that information;
• Obtain independent and specific advice from appropriate experts or other sources.
Accordingly, Transgrid makes no representations or warranty as to the currency, accuracy, reliability, completeness or suitability for particular purposes of the information in this document.
Persons reading or utilising this System Security Roadmapacknowledge and accept that Transgrid and/or its employees, agents and consultants have no liability for any direct, indirect,
special, incidental or consequential damage (including liability to any person by reason of negligence or negligent misstatement) for any damage resulting from, arising out of or in
connection with, reliance upon statements, opinions, information or matter (expressed or implied) arising out of, contained in or derived from, or for any omissions from the information in
this document, except insofar as liability under any NSW and Commonwealth statute cannot be excluded.

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