Using competition to build new transmission at the best price

23 May 2017

Final determination on Transmission Connection and Planning Arrangements

The AEMC today released a new rule that enables more competition in the provision of transmission connections, while maintaining clear accountability for the safety, security and reliability of the transmission network.

The rule also places new obligations on transmission businesses to adopt a more consistent, transparent and coordinated approach when planning their networks.

The national electricity market is evolving as Australia transitions to a low carbon economy. An estimated 30 to 50 new large scale generators, including wind and solar, as well as major energy users, will connect to the transmission network by 2020.

Increasing competition in building new transmission lines and substations that are needed to support these future connections could save over $100 million in the next three years, ultimately minimising the long term costs of electricity for consumers.

The final rule provides more choice, control and certainty for any parties connecting to the transmission network, while at the same time making it clear that the incumbent transmission businesses are unambiguously accountable for providing a safe, reliable and secure transmission network – even if some parts of it are built and owned by other parties.

Transmission businesses will be required to provide more information in their annual planning reports, including more detail on forecast network constraints. Increased transparency should help providers of non-network solutions, such as demand response, to focus on locations where they could defer or reduce the need to invest in the network.

They will also be required to consider investment options in another transmission business’s region so options are not limited by geography or state boundaries. Better planning and coordination should help businesses to identify the lowest cost option to meet future network needs.

The new planning requirements start this month, and new connection arrangements will start on 1 July 2018.

The changes to the connection arrangements will not apply in Victoria, where the regulatory regime for transmission connections is overseen by the Australian Energy Market Operator and is outside the scope of the rule change request. However, the changes to the transmission planning arrangements will apply in Victoria.

The rule change request, submitted by the COAG Energy Council, was largely based on the connection and planning recommendations made by the AEMC in its Transmission Frameworks Review. 

Media: Prudence Anderson, 0404 821 935 or (02) 8296 7817