Market Review: Open

Overview

With a large amount of proposed generation, in the order of 45 GW, expected to enter the national electricity market, this review is considering options for clustering new generators in zones to reduce the costs of new transmission infrastructure needed to connect these generators to the grid.
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With a large amount of proposed generation, in the order of 45 GW, expected to enter the national electricity market, this review is considering options for clustering new generators in zones to reduce the costs of new transmission infrastructure needed to connect these generators to the grid.

Discussion paper

On 13 April 2018 the AEMC published a discussion paper as part of stage 2 of the Coordination of generation and transmission investment review.

The discussion paper presents the AEMC’s initial views on three key developments which may necessitate changes to the current transmission framework: congestion, the treatment of storage and renewable energy zones.

The paper discusses the model of renewable energy zones which the Independent Review into the Future Security of the National Electricity Market: Blueprint or the Future (Finkel Review) suggested be progressed to address the coordination of generation and transmission investment. A range of options for the design of a renewable energy zone are presented and the implications of these design options in terms of cost, risk allocation and the regulatory framework in the National Electricity Market (NEM) are discussed.

To provide context for considering these issues, the discussion paper also provides a detailed description of the current transmission framework in the NEM.

Next steps

The Commission welcomes stakeholder feedback on the analysis presented in the discussion paper. In particular the Commission would like to hear stakeholder views on the potential design options of renewable energy zones and the implications these design options may have on costs, risk allocation and the regulatory framework in the NEM.

The deadline for submissions is 18 May 2018.

Stakeholder submissions will be a key input into the final report, to be published in mid-2018. The final report will provide more detail on the Commission’s views on changes to the regulatory framework that would improve the coordination of generation and transmission investment.

Background

In February 2016 the COAG Energy Council provided the AEMC with terms of reference for a biennial regime to report on a series of drivers that could impact on future transmission and generation investment.

In July 2016, the Commission published a Statement of Approach for stakeholder information, which set out our proposed methodology and approach to consultation that we will adopt in conducting this biennial reporting.

This 2017 review is the first time this reporting regime has been undertaken by the AEMC.  On 18 July 2017 the AEMC published a final stage 1 report on the drivers of change that impact transmission frameworks.  The report recommended that the review progress to stage 2 where a number of options to improve the coordination of transmission and generation are to be considered.

This recommendation was on the basis that:

  • the drivers of transmission and generation investment have changed significantly since October 2015
  • there is likely to be large amounts of transmission and generation investment
  • this expected future investment is uncertain in its technology and location.
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Documentation