The operators of AGL's Bayswater and Loy Yang power stations have been fined $6 million by the Federal Court.

The operators - AGL Energy Ltd subsidiaries, AGL Macquarie Pty Ltd (AGLM) and AGL Loy Yang Marketing Pty Ltd (AGLL) - have been fined for violations of the National Electricity Rules.

The breaches, as identified in a case brought by the Australian Energy Regulator (AER), occurred between September 2018 and August 2020 when the AGL subsidiaries failed to adhere to dispatch instructions from the Australian Energy Market Operator (AEMO) regarding frequency control ancillary services (FCAS). 

These services are essential for grid stability.

AGLM was penalised $3.2 million, and AGLL received a penalty of $2.8 million. 

Justice Button, presiding over the case, says the case shows the importance of power generators supplying contingency services according to their offers to maintain a secure power network. 

She noted that the breaches reduced the availability of contingency FCAS, increasing the risk to power system security during frequency disturbances.

The penalties also consider the cooperation of the respondents with the AER's investigation and their acknowledgment of the breaches prior to legal action.

The AER Chair, Clare Savage, says that maintaining power system security is an ongoing responsibility for all participants in the National Electricity Market.

Frequency control ancillary services are crucial for grid stability, especially during the shift to renewable energy generation. 

AEMO relies on generators' compliance with dispatch instructions and offers to ensure the stability and security of the National Electricity Market. The regulators say generators must be prepared to deliver the backup services they commit to.

The AER's focus on enforcing compliance with obligations related to power system security and efficient outcomes in the wholesale electricity market aligns with its 2023–24 Compliance and Enforcement Priorities. 

The AER says it also aims to ensure generators provide accurate and timely information about their capabilities and availability to AEMO.