Energy Ministers have noted the Australian Energy Market Commission’s (AEMC) recommendations on transmission access reform, specifically not to implement the hybrid model.
The AEMC's final report, delivered to Ministers in September 2024, recommended against implementing the proposed hybrid model of transmission access reform, concluding that existing and planned jurisdictional schemes like Renewable Energy Zones (REZs) and the Capacity Investment Scheme (CIS) are already providing locational signals for investment.
Instead, the AEMC made a series of recommendations that focussed on supporting jurisdictional schemes to drive efficient investment in the energy system.
The hybrid model, which combined priority access arrangements and a congestion relief market, was proposed by stakeholders and developed by the Energy Security Board and Energy Advisory Panel.
The AEMC's work to further develop the model in consultation with market bodies and stakeholders found that in the current context of rapid energy system transformation, it was not clear that the model's benefits would outweigh its implementation costs and complexity.
The AEMC made recommendations to support the effective delivery of jurisdictional schemes including:
- establishing a collaborative forum between jurisdictions and market bodies to support effective delivery of schemes
- improving the quality and timeliness of locational information through AEMO's Enhanced Locational Information reports
- enabling the AER to strengthen incentives for transmission networks to progress efficient, low-cost congestion solutions
- a focus on congestion impacts when designing and implementing schemes that underwrite new energy infrastructure.
AEMC Chair Anna Collyer said the recommendations recognise that coordinating generation and transmission investment through jurisdictional schemes provides a practical pathway for managing the significant transformation required in the National Electricity Market.
"A coordinated and timely transition to a net-zero electricity system is in the long-term interest of consumers.
''Our recommendations focus on ensuring jurisdictional schemes can effectively deliver low-cost, low-emissions energy when and where consumers need it," she said.
Access and pricing arrangements are fundamental components of the National Electricity Market's regulatory framework, designed to signal where generation should locate and how it should operate. Such signals will be increasingly important in the transition to a grid dominated by variable renewable energy.
While reforms to national arrangements could improve these signals, the AEMC found that jurisdictional schemes are currently providing a practical way to coordinate and manage the significant scale and speed of investment required on the pathway to net zero.
The AEMC's recommendations aim to support the effective delivery of these schemes through improved coordination and information sharing between market bodies, governments, and industry participants.
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Media: Jessica Rich | 0459 918 964 | media@aemc.gov.au