An assessment of the prospect of a national framework for increased contestability in the delivery of major transmission projects has been published in a directions paper released by the Australian Energy Market Commission (AEMC) today that also outlines intent to place the workstream on hold.

The workstream forms part of a wider review established to evaluate whether Australia’s regulatory framework adequately supports the timely and efficient delivery of major transmission projects and how it may better support the long-term interests of energy customers.

While initial market feedback indicated some interest in a framework for increased contestability, the AEMC also recognises that it would be important for any approach to contestability in the National Electricity Rules to be implemented on a national basis, to achieve material benefits for consumers. 

Following the announcement of recent initiatives in some states and territories, it is unlikely an agreed approach to contestability will be implemented across the national electricity market in the near future. On this basis, it would not be prudent to continue to focus on this workstream at this time.  

In the meantime, the AEMC intends to continue delivering Stage 3 of its Transmission planning investment review and progressing recommendations from Stages 2 and Stage 3 of the review via any rule changes received.

The AEMC considers that these draft and final recommendations will collectively present a proportionate response to key challenges identified in relation to the frameworks for planning, funding and delivery of major transmission projects. 

In the event work should need to be recommenced, the AEMC has published an analysis of the four potential contestability models presented for feedback in June 2022 and identified a candidate model. This has been summarised in the Directions paper.

The AEMC would like to acknowledge and thank those who provided input and feedback to the contestability workstream of the Review to date. 

The AEMC will continue to monitor developments in the implementation of jurisdictional contestability regimes as well as overseas, to understand and capture useful insights and information.

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