FAILURE OF MARKET OR MARKET
SYSTEMS
PREPARED BY:
Market and System Change
PROCEDURE TYPE:
System Operating Procedure
DOCUMENT REFERENCE:
SO_OP_3706
FINAL APPROVER:
Alan Honecker
DOC. VERSION:
31
DATE:
18 May 2016
This document is current to version 79 of the National Electricity Rules
FAILURE OF MARKET OR MARKET SYSTEMS
History
Version
Date
Author
Checker
Endorser
Approver
Comments
31
18/05/2016
V Lim
N White,
P ErnstRussell
T van der
Walt
A Honecker
30
23/10/2013
R Palmer
Jasper Hoo
T Van Der
Walt
C Brownlee
M Stedwell
29
30/11/2011 R Rigoni
P Biddle
H Gorniak
Modified template
Minor clarification to
section 8.1
28
27/07/2011 P Biddle
D Dwyer
H Gorniak
Section 6 updated for
dynamic ratings
27
19/07/2011
B Vancia
H Gorniak
New AEMO template
and disclaimer.
Major review.
Added section 11.2
when PD is not
current.
26
17/05/2011 J Ng
R Rigoni
H Gorniak
Updated section 5.1.2
Scada system failure
25
15/07/2009 P Ryan
P Uribe
C Brownlee
Section 5.1.2
Updated. SCADA
System Failure
correction.
R Rigoni
Removed the use of BUDS
in sections 10.1 and
Appendix A.
Outlined AEMO actions in
section 10.3.
Minor changes to figure 2.
Removed the alternate
method of issuing dispatch
instructions in section
10.1.
Transferred content to new
template. NER terms
italicized.
Updated Section 8.3, 8.4
and 10.3 references to
correct section.
Minor changes to Sections
8.1 and 9.
Next Review
Next Review Date
Review Type
01/03/2017
Periodic
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FAILURE OF MARKET OR MARKET SYSTEMS
Important Notice
Purpose
This document has been prepared by AEMO under clause 4.10.1 of the National Electricity Rules
(Rules), and has effect only for the purposes set out in the Rules. The Rules and the National
Electricity Law (Law) prevail over this document to the extent of any inconsistency.
Disclaimer
This document might also contain information which is provided for explanatory purposes. That
information does not constitute legal or business advice, and should not be relied on as a substitute
for obtaining detailed advice about the Law, the Rules, or any other applicable laws, procedures or
policies. AEMO has made every effort to ensure the quality of the information in this document, but
cannot guarantee its accuracy or, completeness.
Accordingly, to the maximum extent permitted by law, AEMO and its officers, employees and
consultants involved in the preparation of this document:

make no representation or warranty, express or implied, as to the currency, accuracy, reliability or
completeness of the information in this document; and

are not liable (whether by reason of negligence or otherwise) for any statements or
representations in this document, or any omissions from it, or for any use or reliance on the
information in it.
© 2016 Australian Energy Market Operator Limited. The material in this publication may be used in
accordance with the copyright permissions on AEMO’s website
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FAILURE OF MARKET OR MARKET SYSTEMS
Contents
1
Introduction .............................................................................................................. 7
2
Purpose.................................................................................................................... 7
3
Application ............................................................................................................... 7
4
Related Policies and Procedures ............................................................................. 7
5
SCADA System Failure ............................................................................................ 7
5.1
Market site failover rule. ........................................................................................... 8
6
Market Systems Failure............................................................................................ 8
6.1
Failure of MMS Server ............................................................................................. 8
7
Failure of AEMO Control Centre ............................................................................... 9
8
Market Suspension .................................................................................................. 9
8.1
Authority for suspending the spot market ................................................................. 9
8.2
Black system condition ............................................................................................. 9
8.3
Jurisdictional directions ............................................................................................ 9
8.4
Inability to operate the spot market in accordance with the provisions of the Rules .. 9
8.5
Threshold for suspending the spot market.............................................................. 10
9
Market Suspension due to IT Failures .................................................................... 10
9.1
Failure of NEMDE .................................................................................................. 10
9.2
For a SCADA failure ............................................................................................... 10
9.3
For a failure of the Rebidding System .................................................................... 11
10
Procedure during Market Suspension .................................................................... 12
10.1
Dispatch during Market Suspension ....................................................................... 13
10.2
Pre-dispatch is not considered current if:................................................................ 13
10.3
Pricing during Market Suspension .......................................................................... 13
11
Resumption of the Spot Market .............................................................................. 14
Appendix A
Market Suspension Examples ................................................................................ 16
Figures
Figure 1
The process followed by AEMO in determining the need to suspend the market.... 12
Figure 2
Market Suspension Pricing Decision Map .............................................................. 14
Figure 3
Suspended Region connected to unsuspended Regions ....................................... 16
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FAILURE OF MARKET OR MARKET SYSTEMS
Tables
Table 1
Glossary ................................................................................................................... 6
Table 2
Related policies and procedures .............................................................................. 7
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FAILURE OF MARKET OR MARKET SYSTEMS
Glossary
a) In this document, a word or phrase in this style has the same meaning as given to that term in
the NER.
b) In this document, capitalised words or phrases or acronyms have the meaning set out opposite
those words, phrases, or acronyms in the table below.
c) Unless the context otherwise requires, this document will be interpreted in accordance with
Schedule 2 of the National Electricity Law.
d) References to time are references to Australian Eastern Standard Time.
Table 1
Glossary
Term
Meaning
NER or Rules
National Electricity Rules
NEM or National Electricity
Market
Means: (a) the wholesale exchange operated and administered by AEMO under the
NEL and NER; and the national electricity system.
EMMS
Electricity Market Management System
NSP
Network Service Provider
RTO
Real Time Operations (section of AEMO)
MMS
Market Management System
NEMDE
National Electricity Market Dispatch Engine
SCADA
Supervisory Control and Data Acquisition
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Failure of Market or Market Systems
1 Introduction
a) This Procedure is drafted in accordance with clause 4.10.1 of the NER.
b) Clause 3.14.3 of the NER allows AEMO to suspend the spot market in a region when
certain criteria are met. AEMO must then determine the dispatch and pricing methodologies
that are to apply in that region for the duration of the suspension.
c) If there is any inconsistency between this Procedure and the NER, the NER will prevail to
the extent of that inconsistency.
2 Purpose
The purpose of this Procedure is to provide information about how AEMO manages situations
where the market or market systems fail and which may require suspension of the National
Electricity Market.
3 Application
This Procedure applies to all registered participants
4 Related Policies and Procedures
Table 2
Related policies and procedures
Policies and Procedure
Title
SO_OP_3715
Power System Security Guidelines
SO_OG_3710
Load Forecasting
SO_OP_3705
Dispatch
5 SCADA System Failure
SCADA data is used by NEMDE in the real-time dispatch process. NEMDE selects SCADA data
for processing in the following order:
1) Manually substituted data
2) Good Quality data (for transmission line megawatt and megavar flows, this may be the
good alternative-end measure if primary-end measure is deemed abnormal by EMS)
3) Last dispatch run energy target used as initial megawatt for next dispatch run (for
scheduled SCADA points only: ie. Units, Interconnectors, Regions)
4) Last good SCADA received (for non-scheduled SCADA points only: ie. ‘A’ & ‘S’ terms used
in Constraint RHS terms)
5) Static Default values (for non-scheduled SCADA points only: ie. ‘A’ & ‘S’ terms used in
Constraint RHS terms)
When SCADA data fails, or if there is partial SCADA system failure, and there is no alternative
data, NEMDE follows the following processes:
For Scheduled data:
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Failure of Market or Market Systems

For Trader data (T): if data is suspect, Target from the dispatch run in the previous dispatch
interval (i.e. previous target) is used for an infinite time. (data terms are from within
NEMDE).

For Interconnector data (I): if data is suspect, the Interconnector Flow Target from the
previous dispatch interval is used for an infinite time.

For Region data (R): Forecast regional demand for the next five-minutes. In PD this is the
manual demand forecast for the Region. Dispatch demand if unavailable, is internally
calculated in MMS.
For Unscheduled data (A, S):

If all SCADA is suspect then NEMDE will use the last good values for 72 hours and then
the default values, (subject to the market site failover rule).

If only individual SCADA points are suspect then NEMDE will use the last good value
indefinitely, (subject to the market site failover rule).
For Entered data (E)

Limits (line ratings) have no quality flagging.

Limits are Seasonal-based and sourced from EMS tables, or via SCADA as dynamic
ratings.

Are not subject to the market site failover rule.
Dynamic line ratings

TNSPs provide dynamic line ratings via SCADA (type ‘A’ data). These ratings are written to
a Limit Record (type ‘E’ data). The value in the Limit Record is used by NEMDE. If the
SCADA value is suspect then the last good value remains in the Limit Record.

AEMO may replace the Limit Record value with either a manually entered value or the
default work book ratings supplied by the TNSP.
The 5-minute Demand Estimator uses NEMDE dispatch targets when the TNSP data is suspect or
manually replaced.
5.1 Market site failover rule.
At any time if a SCADA point is suspect in the first dispatch interval following a market site failover,
then NEMDE will use the default value.
6 Market Systems Failure
6.1 Failure of MMS Server
Services will automatically move from the failed node to a second node. An outage will be
experienced while the service is restarted on the next node.
If all nodes are unavailable (due to loss of production MMS site) then transfer of MMS functions to
the alternate site will be initiated. The following services may be impacted on during this time;

Dispatch and Pre-dispatch

MMS production Oracle database

Infoserver database
Re-bids will not be accepted under these conditions.
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Failure of Market or Market Systems
7 Failure of AEMO Control Centre
In the event of control centre failure, AEMO will advise all registered participants with regard to
operational status of each control centre.
8 Market Suspension
The market must not be suspended solely because the spot price has reached the market price
cap or market floor price, or AEMO has issued a direction or intervened in the market.
A failure of pre-dispatch or PASA is not considered sufficient cause to suspend the market.
8.1 Authority for suspending the spot market
The NEM RTO Manager in charge of the shift has the authority to suspend the spot market.
Similarly, the NEM RTO Manager in charge of the shift has the authority to resume operation of the
spot market.
The spot market remains suspended until the declaration is revoked by AEMO informing the
registered participants that the spot market operation can resume.
8.2 Black system condition
In accordance with clause 3.14.3 (a) (1) of the NER, AEMO will immediately suspend the spot
market in a region if the power system has collapsed to a black system.
8.3 Jurisdictional directions
There could be two forms of jurisdictional directions:
1) AEMO has been directed by a participating jurisdiction to suspend the market in a region
following the formal declaration by that participating jurisdiction of a state of emergency
under its emergency services or equivalent legislation,
 AEMO would suspend the market in that region.
2) AEMO has been directed by a jurisdiction to operate all or part of the power system in a
manner contrary to the provisions of the Rules following the formal declaration by that
participating jurisdiction of a state of emergency under its emergency or equivalent
legislation,
 AEMO would assess the impact of the direction. If the impact is greater than the
threshold level specified in section 8.5, AEMO will suspend the spot market in that
region.
8.4 Inability to operate the spot market in accordance with the provisions of
the Rules
AEMO may not be able to operate the spot market in accordance with NER in the following
circumstance.

IT failures – see section 9.

Following a major power system emergency, if the spot market has not been suspended
under NER 3.14.3 (a) (1) but it has become impossible to operate the spot market in
accordance with the Rules, then AEMO will assess the impact on the spot market operation
using the threshold given in section 8.5 and use the provisions under NER 3.14.3 (a) (3) to
suspend the spot market.
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Failure of Market or Market Systems
8.5 Threshold for suspending the spot market
If the impact of the jurisdictional direction to operate the power system in a manner contrary to the
provisions of the Rules or the impact of the power system emergency results in dispatching
generation or market network services using manual dispatch instructions (due to the unavailability
of network constraints) with a cumulative effect on at least 20% of the predicted regional load.
This is the threshold at which AEMO would determine that it is impossible to operate the market in
accordance with the provisions of the Rules.
Notwithstanding the above, AEMO may suspend the spot market in a region in situations where
the impact of the jurisdictional direction or the cumulative effect of generation or market network
services dispatched using manual dispatch instructions is less than 20% of the predicted regional
load if AEMO determines that it is not possible to operate the spot market in accordance with the
provisions of the Rules.
9 Market Suspension due to IT Failures
When determining under clause 3.14.3(a)(3) of the Rules that it has become impossible to operate
the spot market, the following criteria can be used as a guideline to assist the NEM RTO Manager
to make a decision to suspend the spot market. Due to issues with pricing, if it is determined that
more than one region is to be suspended; the whole market will be suspended. Suspension of a
region with no interconnector SCADA data available will also force the suspension of the entire
market (See Appendix 2 for details).
9.1 Failure of NEMDE
1) If more than 6 dispatch intervals have been missed; and
2) If the appropriate IT system will not be available within a reasonable period (more than 10
minutes); and
3) If changes in power system conditions since the last valid dispatch run has resulted in
errors in dispatch exceeding the following levels:
 200 MW in the New South Wales Region (suspension in the NSW Region only), or
 200 MW in the Victorian Region (suspension in the VIC Region only), or
 150 MW in the Queensland Region (suspension in the QLD Region only), or
 80 MW in the South Australian Region (suspension in the SA Region only), or
 80 MW in the Tasmanian Region (suspension in the TAS Region only), or
 350 MW total across all regions (suspension in all regions).
9.2 For a SCADA failure
Wherever possible AEMO will arrange for SCADA inputs to be hand-dressed on a five minute cycle
to maintain an accurate dispatch, however if a large number of SCADA points have failed this will
no longer be possible and in such a case, the Market may be suspended for a given Region when:
1) SCADA failure has extended beyond 6 dispatch intervals; and
2) If the appropriate IT system will not be available within a reasonable period (more than 10
minutes); and
3) If changes in power system conditions since the last valid dispatch run has resulted in
errors in dispatch exceeding the following levels:
 200 MW in the New South Wales Region (suspension in the NSW Region only), or
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Failure of Market or Market Systems
 200 MW in the Victorian Region (suspension in the VIC Region only), or
 150 MW in the Queensland Region (suspension in the QLD Region only), or
 80 MW in the South Australian Region (suspension in the SA Region only), or
 80 MW in the Tasmanian Region (suspension in the TAS Region only), or
 350 MW total across all regions (suspension in all regions)
9.3 For a failure of the Rebidding System
1) Rebidding failure is due to AEMO Systems and affects all Market Participants for both main
and backup rebidding systems; and
2) Rebidding failure has extended beyond 6 dispatch intervals; and
3) The appropriate IT system will not be available within a reasonable period (more than 10
minutes); and
4) If the continued use of non-conformance procedures would cause power system security
issues.
The inability of a small group of Market Participants to rebid is considered insufficient cause to
suspend the market and in these cases, the non-conformance procedures will apply (refer
SO_OP_3705 Dispatch).
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Failure of Market or Market Systems
NER Clause 3.14.3(a)(3)
"... it has become impossible to operate the market in accordance with the code"
Dispatch Systems or
SCADA Failure
Have
more than 6
Dispatch Intervals
been affected?
Failure of Bidding
Systems
Do Not
Suspend
the Market
No
Is the
failure due to
AEMO systems and
does it affect both main
and backup bidding
systems?
No
Yes
Have
IT staff advised
that IT will be unavailable
for more than
10 mins.
Do Not
Suspend
the Market
No
No
Yes
Has the
failure extended
past six dispatch
intervals?
Yes
Yes
Has the
failure resulted
in dispatch errors exceeding:
Vic or NSW: 200MW
Queensland: 150MW
SA or TAS: 80MW
Yes
Do Not
Suspend
the Market
No
Has the
failure resulted
in dispatch errors exceeding
350MW in all
regions
No
No
No
Suspend the
entire market
Will the
continued use
of non-conformance
procedures cause system
security
issues?
Suspend the affected region
NER Clause 3.14.3(a)(2)
"... AEMO has been directed by a participating
jurisdiction to suspend the market ..."
Figure 1
Yes
Yes
Yes
Suspend that
region only
Have
IT staff advised
that IT will be unavailable
for more than
10 mins.
NER Clause 3.14.3(a)(1)
"... the power system has collapsed to a black system"
The process followed by AEMO in determining the need to suspend the market
10 Procedure during Market Suspension
If AEMO suspends the market, a Market Notice advising of the Market Suspension and the
reasons leading to the suspension will be issued.
AEMO must determine the dispatch and pricing mechanisms during the Market Suspension and
publish a market notice advising of the mechanisms being used.
If the dispatch or pricing mechanisms change (e.g. Pre-dispatch schedule is no longer current)
then a market notice is required to update the market with the latest mechanisms being used.
The following business day, AEMO will determine the spot prices during the Market Suspension
trading intervals pursuant to the pricing mechanism defined in the Market Notice.
In the event of failure of the normal Market Notice Message System, AEMO will communicate with
registered participants using the AEMO Emergency Messaging System.
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Failure of Market or Market Systems
10.1
Dispatch during Market Suspension
In a region or regions where, in AEMO’s reasonable opinion, it remains possible to do so, dispatch
is to continue in accordance with NER clause 3.8.
If, in AEMO’s reasonable opinion, it is not possible in a region or regions to continue to dispatch in
accordance with NER clause 3.8, then AEMO will use the most recently published pre-dispatch
schedule if it is still current.
Where possible, dispatch instructions will be issued electronically via the automatic generation
control system. AEMO may issue dispatch instructions in some other form if in its reasonable
opinion the normal processes are not available.
10.2 Pre-dispatch is not considered current if:
1) The difference between actual demand and forecast demand exceeds the load forecasting
error threshold. (refer to SO_OP3710-Load Forecasting)
2) There has been a material change to scheduled plant status (eg. unit availability).
3) There has been a material change to constraints in dispatch (eg. transfer limit has
changed).
10.3 Pricing during Market Suspension
The flowchart below outlines the process followed by AEMO when determining prices during
market suspension in one region, or in multiple regions.
The pricing mechanism can only be changed downwards as indicated in the flowchart in the next
section (Figure 2) of this document.
Appendix A outlines the actions required by AEMO to manage interconnectors in the event of a
market suspension in accordance with NER clause 3.14.5(d) and (e).
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Failure of Market or Market Systems
Is it
possible to
continue dispatch
and determination of spot
prices in the suspended
region in accordance
with the
NER?
NER Clause 3.14.5 (d)
NER Clause 3.14.5 (c)
Continue with dispatch and determination of the spot
prices and the ancillary service prices in the suspended
region in accordance with NER clauses 3.8 and 3.9
YES
NO
NER Clause 3.14.5 (e)
Is the
suspended
region connected
by an unconstrained
interconnector to another
region and the dispatch and pricing
in the other region is
continuing in accordance
with NER clauses
3.8 and
3.9?
NER Clause 3.14.5 (g)
Determine the spot price by application of an appropriate
inter-regional loss factor to the spot price in the adjacent
region. This inter-regional loss factor is determined by
AEMO in accordance with the methodology in the NER
clause 3.6.2A and the actual flows on the relevant
unconstrained interconnectors.
YES
Continue to determine ancillary service prices in the
suspended region in accordance with the NER clauses 3.8
and 3.9.
Continue with the spot price determination as above until
the spot market is no longer suspended or until it is not
possible to do so, then proceed to the next step as shown
below
NO
NER Clause 3.14.5 (h)
Is
there a
current pre-dispatch
schedule available for
the suspended
region?
The spot prices and ancillary service prices in the
suspended region are set at AEMO’s forecast regional price
determined in accordance with the most recently
published pre-dispatch schedule if it is still current.
YES
Continue as above until the spot market is no longer
suspended or until it is not possible to do so, then proceed
to the next step as shown below.
NO
NER Clause 3.14.5 (j)(l)(m)(n)
AEMO must set the spot prices and ancillary service prices in the suspended region at the prices set out in the
relevant market suspension pricing schedule developed and published in accordance with NER clause 3.14.5(i).
Spot prices at all other regional reference nodes connected by an interconnector that has an actual flow towards the
suspended regional reference node must not exceed the spot price in the suspended region multiplied by the
average loss factor between the regional reference node and the suspended node for that trading interval.
Figure 2
Market Suspension Pricing Decision Map
11 Resumption of the Spot Market
If the spot market was suspended due to a direction from a participating jurisdiction, then the
market can be resumed with the consultation of the jurisdiction, which had originally directed the
market to be suspended in addition to satisfying the above general conditions.
If the spot market was suspended (following declaration of the black system condition or due to the
inability to operate the spot market in accordance with the provisions of the Rules), the spot market
can be resumed only after satisfying the following conditions:
1) The black system condition no longer exists.
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Failure of Market or Market Systems
2) The original cause of the market suspension has been eliminated or sufficient steps have
been taken to exclude its influence on market processes and AEMO assesses that the
possibility of suspending the spot market within next 24 hours due to the same cause is
minimal.
3) AEMO determines that it can operate the market in accordance with the provisions of the
NER.
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Failure of Market or Market Systems
Appendix A
Market Suspension Examples
Example 1 – SCADA Failure in One Region
Consider the situation where SCADA has failed in a region resulting in excessive errors in
dispatch. The market systems may still be fully operational, however, AEMO has determined it is
not possible to continue to dispatch and determine spot price in accordance with NER clauses 3.8
and 3.9 and suspends the market in that region.
If the suspended region is connected to a non-suspended region via an unconstrained
interconnector then pricing will be determined in the suspended region in accordance with NER
clause 3.14.5 (d) & (e). In this case AEMO will place “equal to” constraints on the interconnector(s)
connecting to the suspended region where the right hand side of the constraint is determined from
the interconnector schedule. The interconnector schedule is determined from the most recently
published pre-dispatch schedule if it is still current. Where no pre-dispatch schedule is available,
use the latest valid loading level and treat this as constant.
If the suspended region is interconnected to two non-suspended regions, and both interconnectors
are unconstrained, deem the interconnector that is operating closer to its limit as constrained.
Consider the diagram below in which, as a worse case example, a single region that is connected
to two other regions is suspended.
REGION 1
Figure 3
REGION 2
SUSPENDED
REGION 3
Suspended Region connected to unsuspended Regions
In order for NEMDE to continue dispatching plant in Regions 1 and 3, AEMO must place “equals
to” constraints on the two interconnectors where the right hand side of the constraint is determined
from the interconnector schedule. Note that for the purpose of price setting, one of these
interconnectors must be treated as constrained. Otherwise, if the prices in regions 1 and 3 were to
diverge, pricing through clause 3.14.5(e) would not be possible. (Note that this is only an issue
where the suspended region is connected to two unsuspended regions).
Dispatch must be conducted under the following procedure:
1) Determine the interconnector schedule(s) from the latest pre-dispatch results if it is still
current. (Where no pre-dispatch is available, use the latest valid loading level and treat this
as constant).
2) Place “equals to” constraints into the MMS for NEMDE to use in the dispatch of Regions 1
and 3.
3) Inform all Market Participants in region 2 to follow their targets as shown in the specific
latest valid pre-dispatch.
4) On unforseen events in region 2 (not catered for by pre-dispatch) manually dispatch plant in
region 2 to maintain the interconnector schedule. Note that this assumes valid SCADA is
still available from both interconnectors. If this is not the case, AEMO would have no option
other than suspending the entire market as pricing could no longer be determined in
accordance with the code.
5) If step 4 presents a system security issue, alter the interconnector schedule(s) accordingly.
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