The AEMC today published terms of reference from the Standing Council of Energy and Resources for a review to test a new model for cost efficient investment in future generation and transmission of electricity.
The Optional Firm Access Review will develop and assess the optional firm access package which was recommended by our Transmission Frameworks Review (April 2013).
Under the optional firm access proposal generators would drive and pay for much of the transmission investment required by the market in return for more certainty of access to networks. At the same time they would be encouraged to factor in transmission costs when deciding where to build new generation. Better aligning transmission and generation investment has the potential to minimise prices for customers in the longer term.
The AEMC and AEMO are working cooperatively on this review. Both organisations will contribute to an assessment of the impacts of implementing the model on everyone in the market. The project will also explore options for an efficient implementation process. The proposed model is technically complex and would significantly change the market. Accordingly, this review will emphasise opportunities for extensive engagement with stakeholders and a project plan highlighting the timetable for public consultation will be released shortly.
For information contact:
AEMC Chief Executive, Paul Smith, (02) 8296 7800
AEMC Senior Director, Anne Pearson (02) 8296 7800