The market operator's draft 2020 Integrated System Plan provides useful guidance for managing the energy transition and ensuring timely investment in major transmission lines.
Australian Energy Council's Chief Executive, Sarah McNamara, welcomed the Australian Energy Market Operator's (AEMO) 20-year plan and said the blueprint's phased implementation was a sensible approach.
"Each network investment affects potential market investments and needs to be carefully and transparently considered," she said. "AEMO proposes a step-by-step approach to a progressively more integrated system over time.
"The plan recognises existing projects already under regulatory consideration, such as EnergyConnect between South Australia and New South Wales, whilst assessing the need for new transmission lines as part of the broader shift in the generation mix.
"It has proposed that some projects, such as a medium sized upgrade to the Queensland to New South Wales interconnector, should soon begin the initial phases of their regulatory processes.
"The plan has identified prospective "Renewable Energy Zones", areas of high solar and wind that can be remote from the existing grid, however it does not recommend any very remote projects at this time. Sensibly it prefers augmentations that simultaneously provide less remote renewable opportunities whilst also strengthening the existing grid.
"Whilst much of the existing dispatchable generation fleet will close in the decades to come, in the meantime it continues to be a critical part of the power system. Its economic life will be determined through competitive market forces and the age of individual plant.
"AEMO's plan flags the important role targeted transmission investment can play in supporting the energy transition as more renewables, flexible gas and new technologies like storage come into the system.
"Major investments like interconnectors can play an important evolving role in a decarbonised electricity grid, but will need to be individually assessed through the regulatory investment test overseen by the Australian Energy Regulator.
"This will be critical to ensure the cost-effectiveness of each project," Ms McNamara said.
About the Australian Energy Council
The Council represents 23 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
