Establishing national rules for distribution network planning will facilitate improved reliability outcomes across the National Electricity Market by creating a level playing field for network investment and operation decisions, while promoting the inclusion of non-network alternatives.
AEMC Chairman, Dr John Tamblyn, today outlined recommendations to the Ministerial Council of Energy on the design of a national framework for electricity distribution network planning.
The recommendations were contained in the final report for the Review of a National Framework for Electricity Distribution Network Planning and Expansion which was initiated by the Ministerial Council of Energy in December 2008 as part of its national energy reform agenda.
"The proposed design of the national framework will result in a clearly defined and efficient planning process for distribution network investment and support the efficient development of distribution networks," Dr Tamblyn said.
"Distribution networks play an important role in facilitating competition, efficient resource use and reliable service delivery in Australia's electricity markets,"
"Appropriate consistency and transparency of information and processes for distribution network planning and investment activities will allow market participants to make more efficient investment decisions and non-network providers to propose credible alternatives."
"This Review comes at a time when the energy industry will be undergoing a significant transformation driven by the introduction of the Australian Government's Carbon Pollution Reduction Scheme and the expanded national Renewable Energy Target" he said.
"These policies will create significant challenges for network planning and operation. Establishment of a robust national framework for distribution network planning is therefore timely and will strengthen the capacity of the electricity market to respond effectively and reliably to these challenges."
The proposed national framework would comprise of:
- annual publication of a distribution planning report for each network which informs on load, network capacity, potential limitations and projects for the next five years
- a Demand Side Engagement Strategy which promotes a constructive engagement by distribution network service providers' with non-network providers
- transparent arrangements for the joint planning of investments affecting both transmission and distribution networks
- a new project assessment process - called the Regulatory Investment Test for Distribution (RIT-D) process. - to identify the most economic option to address a significant problem on the network
The Final Report also recommends initiation of a separate review on the merits of a national approach to the specification and implementation of security and reliability standards for the design and operation of distribution networks.
For further information:
AEMC Chairman, Dr John Tamblyn 02 8296 7800
AEMC Communications, Prue Anderson, 02 8296 7800 or 0404 821 935