Australia proposes rules to stabilize grid, avoid blackouts

The recommendations from the Australian Energy Market Commission are the latest in a series of measures taken by the government and regulators to shore up power supply in the wake of a string of blackouts, warnings of gas shortfalls and soaring energy prices.

The commission's chairman, John Pierce, said the technical proposals would address risks to energy security created by the power system's shift toward renewable energy, which has introduced more complexity in running the grid when the wind and sun die down.

"Our reform package is looking at ways to stabilize the system as the generation mix changes, and new technology generators connect," Pierce said in a statement.

The commission called for the market to use new technology like batteries to back up the system when there is a sudden supply outage, among a range of technical measures to shore up grid security.

Networks could contract with suppliers of services like fast frequency response from emerging technologies like batteries, to help maintain minimum security levels, it said.

The commission also called for new connecting generators to pay for remedial action if they harmed the strength of the system.

Looking to prevent further outages and cap rising energy prices the federal government and states have announced plans to restart mothballed gas-fired power plants, fund energy storage and introduce gas export controls.

However the latest outlook from the Australian Energy Market Operator released earlier this month warned that despite those efforts to beef up supply, eastern Australia's power grid will be stretched again if fierce heatwaves hit over the next two summers.

It comes on the heels of a call from Australia's chief scientist for the federal government to set a "fuel neutral" clean energy target that provides an incentive to build new generation to cap soaring power prices, cut carbon emissions and keep the lights on.

(Reporting by Joseph Hinchliffe; Editing by Sonali Paul and Richard Pullin)