Rules to support the power system transition at lowest cost
The power system is transitioning, with a large number of renewable generators like wind and solar farms connecting, while older generators are retiring.
These changes are being driven by government policies to support the uptake of renewable energy to reduce emissions, the rapidly decreasing cost of renewable technology and changing consumer preferences.
The AEMC has made a number of new rules and completed reviews to help improve the process for planning, coordinating and investing in generation and transmission infrastructure. This includes:
Review of the coordination of generation and transmission implementation – access and charging
A huge amount of generation will be built in the national electricity market in the coming years, taking the place of ageing coal-fired power. With more generators seeking to connect, the transmission network is expected to become increasingly congested. To help deliver the right amount of new transmission infrastructure to meet future needs, while keeping costs to consumers as low as possible, in March 2019 we started consultation on proposed reforms to:
- the way generators access and use the electricity transmission network
- charging arrangements which enable transmission businesses to recover the costs of building and maintaining transmission infrastructure, both within and between regions.
Speeding up implementation of priority transmission projects
In April 2019 we made a final rule to streamline the regulatory process for priority projects identified in the Australian Energy Market Operator (AEMO)'s Integrated System Plan. The proposed projects are a new interconnector between South Australia and New South Wales and minor upgrades to the interconnectors joining QLD-NSW and VIC-NSW.
Review of the definition of unserved energy
In August 2019 the Reliability Panel completed a review of the definition of unserved energy used in evaluating whether the reliability standard has been met. The reliability standard, which guides how much electricity capacity is needed, is expressed in terms of unserved energy. The Panel clarified and simplified the definition of unserved energy used in post-event analysis of wholesale supply interruptions by examining what should be included or excluded from the calculation of unserved energy.
Three year notice of closure rule
In November 2018 we made a final rule requiring generators to give at least three years’ notice before closing. This information will help market participants respond to possible future shortfalls in electricity generation, for example by building replacement capacity.
Annual market performance review
In April 2019 the Reliability Panel published its annual review of the reliability, security and safety of the national electricity market for the period July 2017 to June 2018. The review highlighted how Australia’s energy system is cleaner and greener, but the speed of structural change is putting growing pressure on power system security and reliability.
Improving the transparency and consistency of medium term reliability forecasts
In May 2018 we published a new rule to improve the transparency and consistency of medium term reliability forecasts to signal whether or not electricity supply is projected to meet demand in the medium-term.
Review of the reliability standard and market price settings
In April 2018 the AEMC's Reliability Panel published its four-yearly review of the reliability standard and market price settings – a set of parameters that bear on price, investment and ultimately reliability in the national electricity market. The Panel found that the current standard and balances the prices consumers pay for electricity against the cost to consumers of not having electricity there when it’s needed.
Review into the coordination of generation and transmission investment.
In December 2018 we published a comprehensive reform package to improve the coordination of investment in electricity generation and transmission to help support the large amount of new generation connecting to the grid in the coming years and protect consumers from paying too much.
Reliability frameworks review
In July 2018 we published a final report for our Reliability frameworks review. This review considered the regulatory and market frameworks needed to support a reliable supply of electricity as the power system transforms to include more variable, intermittent generation and demand-side innovation. Recommendations are now being progressed through our reliability work plan.
Transmission connection and planning arrangements
In May 2017 we made new rules that provide more choice, control and certainty for connecting parties, while at the same time making it clear that the incumbent TNSPs are accountable for providing a safe, reliable and secure transmission network.