Submission to AEMO Draft 2023 Transmission Expansion Options Report

PIAC provided a response to the Australian Energy Market Operator (AEMO) on the Draft 2023 Transmission Expansion Options Report.

We call for the Integrated System Plan (ISP) to play a greater role in ‘orchestrating’ the energy transition. This means co-optimising the transformations in the generation, storage, transmission, and consumption of energy. Currently the ISP is set up to optimise the transmission build. Considering this aspect in isolation from the others not only results in sub-optimal recommendations for the transmission build, it also fails to live up to the ISP’s purpose as a ‘whole of system plan’.

We propose adding two further options reports alongside the Transmission Expansion Options Report: a Generation and Storage Options Expansion Report and a Distributed Energy Resources (DER) Options Expansion Report.

We suggest adjusting how the stakeholder engagement on these reports is facilitated in order to allow meaningful input from a diverse range of stakeholders, including consumers. Specifically, the reports should provide clear alternatives that enable stakeholders to indicate their ordered values and preferences for energy system expansion over different time horizons. Currently the Transmission Expansion Options Report does not do this.

Finally, we support the inclusion of risk allowances in the baseline estimates for options in early stages of development. However, we believe these should be much larger. As projects like PEC, Humelink and the Central West Orana show, the proposed allowances do not reflect our experiences of cost increases for large transmission projects so far. We argue that the risk allowances should be increased by a factor of three or four, and that risk allowances should be adjusted according to the size of the project, reflecting the historical experience of larger projects having proportionally larger divergences in estimates to final costs than smaller projects.