Discussion paper
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The COAG Energy Council has asked the Australian Energy Market Commission (AEMC or the Commission) to undertake biennial reporting on a set of drivers that could impact on future transmission and generation investment. This work has a focus on evaluating the transmission frameworks in respect of providing better co-ordination of investment between the transmission and generation sectors.

The Commission commenced stage 2 of this review in August 2017. This discussion paper presents the Commission's initial views on three key developments which may necessitate changes to the current transmission framework:

1. likely future congestion on transmission networks as more generators seek to connect to the grid in places where there is not substantial spare capacity

2. new types of generation capability – such as large-scale battery storage – connecting directly to the transmission network

3. more lower emissions generation such as wind and solar farms entering the market, which may need to locate in areas that are at the edges of the existing network, potentially in new renewable energy zones (REZs).

These developments were highlighted in stakeholder submissions to the AEMC’s earlier approach paper. Our preliminary analysis of the implications for the transmission framework of congestion, the treatment of storage and REZs are set out below. This paper provides an opportunity for stakeholders to give feedback on this analysis, ahead of a final report in mid-2018.

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