PIAC welcomes the opportunity to respond to the Australian Energy Market Commission’s (AEMC) draft determination regarding the efficient management of system strength on the power system rule change.
We broadly support the AEMC’s draft determination, considering the measures will help ensure the low-cost provision of system services and allow the timely and efficient connection of new generation.
PIAC considers the cost should be recovered from generators as they are the major beneficiaries of reliable system strength. The majority of the potential benefits of the draft determination arrangements accrue to new generators, who will have more certainty over having sufficient system strength to connect and operate, and will face fewer barriers to connecting.
PIAC stresses, while recovering costs from generators may be opposed by generators, there is no evidence to suggest the costs would discourage new investment.The AEMC should prioritise the interests of consumers, who do not wish to shoulder and are not the primary beneficiaries of these costs of system strength procurement.
PIAC urges transparency, predictability and accessibility over the process of determining nodes, and transparency over how the system strength requirement is determined.