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Discussion paper

Coordination of generation and transmission investment: options paper

21 Sep 2018
Description

The Australian Energy Market Commission (AEMC) has 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. 

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2018
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