PIAC lodged a submission to the Australian Energy Market Operator’s (AEMO) issues paper on its Integrated System Plan (ISP) methodology. PIAC favours the ISP being an independent and expert assessment of what combination of generation, network and other investments will be in the long-term interest of consumers and the system as a whole.
PIAC recommends the ISP reconsider any major proposed projects on the merits of their costs and benefits to consumers to determine whether they contribute to the optimal development path rather than accepting them as part of the base case. PIAC recommends the ISP also identify and highlight where there may be material concerns with the appropriateness of the current regulations for risk and cost allocation. In these cases, AEMO should make recommendations for how these may be addressed including through regulatory reform.
PIAC supports AEMO continuing to improve the engineering assessment to better model and reflect the real-world operation of the power system including allowing an efficient (non-zero) level of network congestion and generation curtailment to avoid over-investment.
PIAC supports AEMO improving how distribution planning processes are incorporated into the ISP. While PIAC supports the principles of the collaborative work AEMO has begun we recommend AEMO continue to enhance how sub-transmission and distribution networks are incorporated into both the ISP modelling and the projects and activities that make up the optimal development path.