Have your say on the best way to implement AEMO’s Integrated System Plan

The Australian Energy Market Commission (AEMC) today called for submissions on the best model to make the integrated system plan developed by the Australian Energy Market Operator (AEMO) an actionable strategic plan. This options paper, including the feedback from stakeholders, will be an input into the Energy Security Board’s advice to the COAG Energy Council in December 2018 on how to convert the integrated system plan into an actionable strategic plan.

The integrated system plan, published in July 2018, forecasts the overall transmission system requirements for the national electricity market over the next 20 years. Today’s options paper seeks stakeholder views on how AEMO’s plan could be implemented.

Transmission assets can be very expensive, running into billions of dollars. Once they are built, consumers pay for them for decades. The paper sets out five options for linking AEMO’s role as national transmission planner more strongly to the individual investments undertaken by network businesses.

All five options would require a robust consultation process and a comprehensive cost-benefit analysis, with the objective of protecting consumers from paying for inefficient investment.

There are several key stages involved in transmission investment. At each of these stages, transmission investments - and alternatives to them such as demand response – must be appropriately identified, tested, costed, consulted on and assessed against the network need.

For each of the five options, the paper sets out who would be responsible for each of the key stages, and what changes would be needed to the regulatory framework as a result of the allocation of responsibilities. The spectrum of options moves from an enhanced status quo, where transmission network businesses keep responsibility for the majority of steps in the transmission planning and investment process, to an option where AEMO would take on the responsibility for all of the steps as part of the integrated system plan.

The Energy Security Board will be holding two stakeholder forums on the options for making the integrated system plan an actionable strategic plan, issues relevant to the RIT-T and the status of the Group 1 and Group 2 projects identified in the integrated system plan. Feedback received from stakeholders at these forums will be an input into the Energy Security Board’s advice to the COAG Energy Council in December 2018.

We will publish a final report in December 2018.

Background

This options paper is part of the AEMC’s review into the Coordination of generation and transmission investment. Under Terms of reference provided by the COAG Energy Council, the AEMC is considering ways to improve the coordination of transmission and generation investment so new supply can be added to the system at the lowest possible cost.

Our review includes looking at transmission charging arrangements, transmission planning arrangements, generator access arrangements in the national electricity market, and also the development of renewable energy zones as raised in the Finkel review.

This work is also part of the AEMC's System security and reliability program.

Media: Prudence Anderson, Communication Director, 0404 821 935 or DL (02) 8296 7817.