Market Review: Open

Overview

The Australian Energy Market Commission (AEMC) published a draft report as part of Stage 3 of the Transmission Planning and Investment Review on 22 September 2022.
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The Australian Energy Market Commission (AEMC) published a draft report as part of Stage 3 of the Transmission Planning and Investment Review on 22 September 2022.

The draft positions in Stage 3 seek to examine several areas in the framework where the regulatory treatment of major projects can be simplified, made timelier, and provide more certainty. This is crucial to support the timely and efficient delivery of major transmission projects and facilitate the decarbonisation of the energy system. 

The Commission has drawn on stakeholder feedback to prioritise five issues in the Stage 3 draft report. These are: streamlining the economic assessment process, emission abatement, concessional finance, managing the exclusive right with no obligation to invest and managing cost risk and uncertainty on the ex-ante framework. 

As part of the review, feedback is also being sought on potential economic assessment models for major projects. These are:

  1. Option 1 – enabling early works to start sooner and to commence before the Regulatory Investment Test for Transmission (RIT-T)
  2. Option 2 – the RIT-T is simplified to choose the preferred option through a least cost assessment
  3. Option 3 – the RIT-T is removed in favour of an improved ISP assessment.

Stakeholders are invited to make submissions to the draft report by 03 November 2022.

The AEMC will be hosting a virtual public forum on the Stage 3 draft report

The Commission will be holding a virtual public forum on 04 October 2022. The forum will set out the key findings and draft positions in the Stage 3. Stakeholders will be given an opportunity to ask questions. 

To register for this forum please visit the registration page.  

The issues to be addressed in the Review have been separated into Stages given the range and complexity of issues 

The Review looks at multiple issues relating to the planning and delivery of transmission infrastructure. Many of these issues are complex and interlinked, but all go to the overarching objective of obtaining the right balance between time and efficiency to support the transition to net zero. 

Work is being delivered in stages. This recognises that some issues can be addressed more quickly, while others may require more significant work due to their inherent complexity. These stages are:

Stage 2 – near-term reforms: This stage focuses on both reducing uncertainty and near-term solutions, including recommendations to address any foreseeable financeability issues which may arise.

Stage 3 – longer-term reforms: This stage focuses on issues that are of considerable complexity and/or are longer-term reforms. The key area of focus for Stage 3 is ensuring the economic assessment process facilitates the timely delivery of major projects.

Contestability workstream: This workstream focuses on examining whether contestability in the provision of transmission services could be a proportionate approach to the existing regulation of transmission projects. 
 

Key milestones 

The upcoming key milestones are: 

  • Stage 2 final report — October 2022 
  • Stage 3 final report – March 2023 
  • Contestability draft report – TBC 

Background 

The National Electricity Market (NEM) is experiencing a significant transition from reliance on thermal generation to demand being principally met by geographically dispersed renewable generation. Substantial investment in transmission infrastructure is required to underpin the transition to clean energy and bring power from new renewable generation and storage to consumers.

It is vital the regulatory framework can accommodate discrete investments of the size and scale required for the transformation. It also needs to be sufficiently robust to manage the uncertainty stemming from the scale and pace of such a  transition.

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Documentation

STAGE 3 - DRAFT REPORT

AEMC documents