First Interim Report
On 17 November 2011 the AEMC published the First Interim Report for the Transmission Frameworks Review. This report sets out five alternate paths for reforming the role and provision of transmission networks. These range from packages that are similar to the current arrangements whereby generators are not entitled to a defined level of transmission service but are not required to pay for network use, to packages that redefine the rights that generators have to use the transmission network.
The First Interim Report also sets out options for enhancing the planning and connection arrangements. These could apply under the current or alternative arrangements.
The Commission has not identified any preferred options at this stage of the review.
Stakeholder views are being sought on these proposals which, combined with further analysis, will inform the next stage of this review. Submissions are due on 27 January 2012.
Given the length and complexity of the First Interim Report, the Commission has published a shorter, less technical Overview Report to provide a summary of the matters on which we are consulting. However, the Overview Report should not be used as a substitute for considering or responding to policy proposals as it does not provide the same context and detail as the full report.
The Commission is also publishing a report by Hill Michael that was used to inform the development of one of the policy packages.
A public forum was held on 12 December 2011 in Melbourne. The presentations from the forum have been published under the first interim report section below.
Background
On 20 April 2010, the Ministerial Council on Energy (MCE) directed the AEMC to conduct a review of the arrangements for the provision and utilisation of electricity transmission services in the National Electricity Market (NEM), with a view to ensuring that the incentives for generation and network investment and operating decisions are effectively aligned to deliver efficient overall outcomes.
The AEMC is to review the role of transmission in providing services to the competitive sectors of the NEM, through considering the following key areas together in a holistic manner:
- Transmission Investment;
- Network Operation;
- Network Charging, Access and Connection; and
- Management of Network Congestion.
The review stems from the Commission's previous Review of Energy Market Frameworks in light of Climate Change Policies. In the Final Report for that Review, the Commission recommended that further work be undertaken in relation to the efficient provision and utilisation of the transmission network. This reflected the Commission's finding that climate change policies will fundamentally change the utilisation of transmission networks over time, both between and within regions of the NEM, and that this would place stress on existing market frameworks.
Issues Paper
On 18 August 2010, the AEMC published an Issues Paper for the Transmission Frameworks Review which commenced the public consultation process for the review. The Issues Paper discusses key issues identified by the Commission and the process for the review. The purpose of this Paper was to seek stakeholder comments on whether the AEMC has identified the scope of the issues appropriately, whether there are other issues that should be considered and which issues are the most material.
The Commission was particularly interested to understand the experiences of market participants of operating within the current transmission frameworks. As such, in responding to the Issues Paper, parties were encouraged to provide clearly argued, evidence-based submissions where possible.
Submissions to the Issues Paper closed on 29 September 2010. The submissions highlighted the complexity and long-standing nature of the issues associated with transmission networks, and revealed a diverse range of views on the robustness of current transmission frameworks and their interaction with the generation sector.
Directions Paper
On 14 April 2011, the AEMC published a Directions Paper for the Transmission Frameworks Review. The Directions Paper considered the broad range of issues raised by stakeholders earlier in the review and provided a framework for how the AEMC would consider these issues. The paper identified five key themes, including:
- the nature of access;
- network charging;
- congestion;
- transmission planning; and
- connections.
Although the paper did not pose any specific questions, the AEMC is sought comments from stakeholders on the way it had framed the issues, and whether this represented an appropriate structure for resolving them.
Submissions to the Directions Paper closed on 26 May 2011. Submissions continued to demonstrate the wide range of views held by stakeholders on the workability and efficiency of current arrangements.
Consultative Committee
In accordance with the direction from the MCE, the AEMC established a Stakeholder Consultative Committee with its membership comprising representatives from AEMO, the AER, industry groups and representatives from electricity networks, electricity generators (including renewable generation), electricity retailers and energy end user groups.
The purpose of the Consultative Committee is to provide technical advice to the AEMC, as well as to comment on the analysis and recommendations made by the AEMC throughout the review. The first meeting of the Consultative Committee was held on 26 July 2010. Subsequent meetings have been held on 10 December 2010, 7 March 2011 and 28 September 2011. A synopsis of each of these meetings can be found below.
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