Market Review: Completed
The Australian Energy Market Commission (AEMC or Commission) has decided not to exercise the last resort planning power (LRPP) for 2019. On 28 November 2019, the Commission published the analysis and the considerations informing this decision.
The Commission concluded that transmission network service providers (TNSPs) are adequately considering inter-regional transmission constraints as part of their network investment planning.
This decision was made based on analysis of transmission system planning documents from the Australian Energy Market Operator (AEMO) and transmission network businesses.
The transmission network connecting Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania allows electricity to flow across the entire national electricity market (NEM). The inter-regional flow of electricity is fundamental to the NEM’s operation as a single market.
The LRPP is conferred on the AEMC under the National Electricity Rules. Its purpose is to help ensure timely and efficient inter-regional transmission investment in the NEM for the long-term interests of consumers.
Under the LRPP:
- if there is a constraint that may significantly impact on the efficient inter-regional transportation of electricity in the NEM, and
- the AEMC identifies that there are no current processes or projects underway to address this constraint, then
- the AEMC has the power to direct one or more network service providers to apply the regulatory investment test for transmission (RIT-T) to project(s) that are likely to relieve that constraint.
Integrated System Plan
AEMO published its inaugural ISP in 2018 and is currently preparing the 2019-2020 ISP. The AEMC is working closely with the Energy Security Board (ESB) to develop new rules to action the ISP and streamline the process for regulatory approval of major transmission investments. The ESB recently published draft rules for consultation on these changes. These draft changes will speed up the RIT-T process for projects that are identified in the ISP. They will also replace the LRPP with new requirements on transmission businesses to publish a RIT-T draft report within a period specified by AEMO in the ISP.