The Australian Energy Market Commission (AEMC) today announced it will not exercise the last resort planning power this year, under the National Electricity Rules.
The last resort planning power is an oversight mechanism conferred on the AEMC to complement the planning roles of the Australian Energy Market Operator as National Transmission Planner and transmission network companies.
It allows the AEMC to require network companies to consider and consult on options to alleviate constraints on the interconnected transmission network when these companies have not initiated this process themselves.
To assist it in determining whether to exercise the last resort planning power in 2016, the AEMC has reviewed relevant planning reports prepared by the Australian Energy Market Operator as National Transmission Planner and those prepared by the transmission network companies.
This analysis, set out in a decision report published today by the AEMC, shows that transmission network companies are adequately considering the need for inter-regional transmission investment in their planning activities. It is therefore not necessary to exercise the last resort planning power in 2016.
In the decision report, the AEMC notes that some electricity market stakeholders are actively considering building new interconnectors for a range of reasons beyond the need for inter-regional transmission investment.
ElectraNet is considering a range of potential interconnector options from South Australia to either New South Wales or Victoria which will be subject to a regulatory investment test (RIT-T) process expected to commence later this year.
The Commonwealth and Tasmanian Governments have initiated a feasibility study on a second interconnector from Tasmania to Victoria. A preliminary report on the study was released on 21 June 2016. A final report is due by the end of January 2017.
In addition to these interconnector studies, the COAG Energy Council has tasked officials to review the effectiveness of the RIT-T in the current market environment. The AEMC is on the working group conducting this review which also consists of representatives from the Commonwealth and state and territory governments, the Australian Energy Regulator and AEMO. The working group are preparing a report for energy ministers to consider at the December 2016 COAG Energy Council meeting.
The AEMC is required to report annually on the last resort planning power. The AEMC has not exercised the last resort planning power since it was conferred on it in 2007.
Media: Prudence Anderson 0404 821 935 or DL (02) 8296 7817