In 2016, the Council of Australian Governments (COAG) Energy Council asked the Australian Energy Market Commission to implement a biennial reporting regime on when the transmission regulatory frameworks will need to change, and, if so, what they will need to change to.
The Commission is of the view that change is needed now, so that our transmission regulatory frameworks evolve to be consistent with the transition in the characteristics of the generation mix joining the national electricity market (NEM). Transmission access reform is vital in order for the NEM to effectively manage the current transition underway in generation technologies, whatever this future may look like.
This paper sets out the proposed access model. The proposed model is set out in response to stakeholder feedback that a detailed design - a 'working' model for reform - would be valuable and allow for feedback ahead of drafting rule changes necessary for the reform. The blueprint for our design is summarised at the end of this section. This detail will help stakeholders to consider and work through the potential impacts that the model may have on their operational and investment decisions.
Generation roughly equal to the current size of the NEM (50 GW) is foreshadowed for connection to the grid over the next 10 years. The national electricity market will replace most of its current generation stock by 2040. Unlike the existing power system, the system of the future is likely to be characterised by a large number of relatively small and geographically dispersed generators. Further, these generators are unlikely to be located where there is substantial existing transmission to serve them, and is instead being connected in sunny or windy areas at the edges of the grid, where the network is less strong. In addition, these new types of generation can in general be built more quickly than transmission infrastructure required to serve them.
Stakeholder feedback on the proposals is welcomed, including whether there are different ways the parameters could be designed.