Priority area: generation access and transmission pricing
The shift from large geographically concentrated to small geographically dispersed generation.
Our power system will replace most of its current generation stock by 2040 and will be characterised by many relatively small and geographically dispersed renewable generators, connecting to windy or sunny parts of the network which have historically not required large amounts of transmission capacity.
This requires us to rethink how we plan and develop the market, so we get investment in the right kit, in the right place, at the right time to deliver reliable supply to customers.
Decisions on where to locate and how to operate generation are not in lockstep with spare transmission capacity in the system or decisions on where and how much additional transmission capacity should be built.
And this is slowing the pace of integrating renewables and other new technologies into the grid and putting a handbrake on the energy sector’s ability to reduce carbon emissions. Additionally, current transmission access arrangements do not incentivise generators and storage facilities to locate and operate in a way most likely to minimise costs for consumers.
The AEMC is working closely with AEMO, the AER and the Energy Security Board to develop a framework through the post 2025 market design project that will support our power system through the energy transition.
Key AEMC projects considering changes required in this priority area of reform include:
- Coordination of generation and transmission investment – access and charging review
- Connection to dedicated connection assets
More information about what the AEMC has done to support efficient and coordinated investment in generation and transmission infrastructure.
AEMC’s system security and reliability action plan
This is part of the AEMC’s broader system security and reliability action plan. We are developing market frameworks which allow continued take-up of new generating technologies while keeping the lights on at the least cost to consumers.