The AEMC-established technical working group on grid access reform has held its seventh meeting to help inform the preparation of draft rules to be delivered to Australia’s energy ministers by the end of the year.  

The technical working group is a key part of the grid access reform work the AEMC is leading as part of the Energy Security Board’s post 2025 market design process. This work is fundamental to better integrating new technologies into the national grid. Reforming grid access is crucial to ensuring the rapid change in Australia’s power system is cheaper, faster and fairer across the board. 

During the course of the year, we are working with stakeholders to inform our thinking as we refine the model for access reform. This work has emerged from the AEMC’s Coordination of Generation and Transmission Investment (COGATI) review.

Two key aspects of the model are locational marginal prices (LMP), which better incentivise generators to factor transmission congestion into where they locate, and financial transmission rights (FTRs), which will give generators a risk management tool to protect themselves against congestion and losses. 

The subject of the latest technical working group was on the design, funding and procurement for financial transmission right (FTR) products to cover losses, in addition to congestion. The session also covered whether these products should be combined with FTR products that cover congestion and whether the products are required at all. 

At the meeting the group discussed:

• Funding to payout to holders of loss FTRs – through congestion and loss rent and how actual losses are dealt with
• Where funds to payout holders of FTRs come from – i.e. using auction revenue to fund a combined loss and congestion FTR
• Purchasing of loss FTRs – determining how many should be sold 
• Determining whether there should be separate or combined loss and congestion products or whether loss FTRs should be provided at all. 

Discussion notes and materials from the latest technical working group meeting are now available. A record of questions asked at both TWG#6 and TWG#7 will also be forwarded to TWG members. 

The technical working group includes representatives from consumer groups, energy investors, large consumers, generators, transmission businesses, retailers, the Energy Security Board and market bodies. The group has also now expanded to include members of the ESB technical working group on the post 2025 market design process. 

Anyone who would like to meet with us to discuss the technical working group and the issues and questions raised can contact Russell Pendlebury. 

Media: Kellie Bisset, Media and Content Manager, 0438 490 041 or (02) 8296 7813