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CEC Submission on draft determination and rule on Enhancing investment certainty in the R1 process ERC0363

The original intent of the Clean Energy Council's Investor Certainty in the pre-connection registered data (R1) process was to provide clarity for connecting generators around timelines and processes during the R1 stage of the connection process. This informed the development of our clearly articulated and defined proposed ‘Type’ model approach. The draft rule is a good start in addressing this first issue. However, more is needed to impose discipline to ensure that additional modelling is only requested where this is clearly necessary to manage system security. The draft rule places very little restraint on what modelling can be requested and we remain concerned the historic issues that have imposed major costs on connecting parties will remain largely unresolved. The second objective of the CEC’s original rule change was to move forward the discussion regarding who is best placed to manage the kinds of general power system issues that may arise and impact on a connecting generator moving through the R1 process. Our recommendation was that NSPs are best placed to hold this risk, on the basis they have access to all relevant information and can harness scale economies to resolve issues at lowest cost. We recommend the The Australian Energy Market Commission’s (AEMC) give further consideration to this issue. The kinds of network issues that can delay connections in the R1 stage are likely to become more material as the pace of the transition accelerates, imposing greater uncertainties and costs on connecting generators. The CEC considers overall system costs will be minimised where risk is allocated to the parties who can manage it at the lowest overall cost.

WA Design Paper – Capacity Investment Scheme

The Clean Energy Council considers there could be a risk of misalignment of the WA Capacity Investment Scheme (CIS) and Reserve Capacity Mechanism (RCM) process, through project delays or reductions / cancellation of capacity credits for a CIS Agreement (CISA) project. To ensure alignment, we recommend consideration of processes such as the expedited assessment of CISA projects as critical projects and / or the early certification of reserve capacity being automatically granted (on a conditional basis) when the CISA contract is awarded. Further detail is needed on how delays in the commercialisation of a project will be dealt with. Consideration should be given to permitting projects to operate in the wholesale electricity market (WEM) until they can participate in the RCM. We recommend that eligibility criteria be reviewed to include projects with NCESS contracts and to ensure VPPs using DER resources are included in the second and third rounds of clean dispatchable tenders. In relation to projects which do not qualify for a CISA, we request the Department of Climate Change, Energy, the Environment and Water (DCCEEW) give consideration as to how those projects will be impacted by the WA CIS and release any modelling on the proposed WA CIS’s impact on capacity market and energy markets in the South West Interconnected System (SWIS).

Clean Energy Council Submission on Consultation Paper – Transmission Access Reform EPR0098

The Clean Energy Council strongly recommends further work on the Transmission Access Reform (TAR) project be stopped as soon as possible. Recognising the Australian Energy Market Commission (AEMC) has been tasked with recommending a pathway forward to Ministers, we consider it would be appropriate and accurate for the AEMC to recommend to Ministers that the costs and uncertainties associated with continuing with TAR at this point in time outweigh any of the theoretical benefits of the reform.

Our reasoning for making this recommendation is set out in more detail in the submission. In brief, we consider that work on TAR be stopped as we consider that the reforms being considered:

• increase consumer energy bills through increases in wholesale prices

• require more transmission and REZ infrastructure to be built

• are inconsistent with the new emissions reduction objective in the National Electricity initiative (NEO)

• fail to address purported issues around disorderly bidding and inter regional counter price flows

• undermine existing jurisdictional schemes

• are largely unnecessary given the roll out of jurisdictional policies.

• do not adequately consider the extent to which the market is already responding to congestion, through installation of energy storage with new generation:

• are likely to run counter the work of the Connection Reform Initiative and reduce the effectiveness of the connection process

Clean Energy Council submission on Electricity Transmission Service Standards Incentive Scheme

The Clean Energy Council agrees that the market impact component (MIC) and network capability component (NCC) of the Service Transmission Target Performance Incentive Scheme (STPIS) need to be reviewed. We also agree with the Australian Energy Regulator’s (AER) analysis that indicates the MIC is not working as intended and the NCC is being under-utilised. The CEC recommends the AER pursue a fundamental redesign of the MIC, to reflect its impact on renewable generation and storage revenues and investment more broadly. Spot price effects are no longer the best indicator of long run market impact and consumer costs. Instead, we consider that generator revenue impacts, and consequential impacts on investment efficiency, should form the basis of the MIC. The CEC strongly supports the continuance of the NCC as a core component of the STPIS. There is, and will continue to be, a very high value to consumers from technological improvements in how the grid is managed, particularly any measures that can be used to increase utilisation and optimisation of the available network.

Long duration storage definition review – NSW DCCEEW

The CEC has made a submission to the NSW DCCEEW review on long duration storage definition. The CEC recognises the complexity of the task in terms of balancing short and long term system needs. However, we strongly recommend that consideration be given to the timeframes for building long duration storage solutions, so these assets are in place and fully integrated into the system when they will be most needed, in the mid-2030s onwards. We recommend the department consider how to maintain certainty for investors in all kinds of storage technologies, of both shorter and longer duration. If the department decides to move away from the legislated 8-hour duration target, it will be necessary to replace this with a signal that provides equivalent clarity and certainty for investors. We do not make a specific policy recommendation here, other than noting that it will be very difficult to develop mechanisms that can provide an equivalent level of certainty to a legislated 8-hour target.

Submission on Powerlink’s roles in QLD REZ design and development

The CEC is supportive of the Queensland Government’s and Powerlink’s general approach to the development of REZs in Queensland. The concept of a ‘market led’ approach brings the potential for development of innovative solutions by harnessing the natural forces of the investment market. As with any new reform or policy approach, there will be issues to be addressed along the way. In particular, given the focus on the role of the market to drive efficient projects, the Clean Energy Council considers it particularly important that the QLD frameworks provide a reasonable allocation of risk between Powerlink and foundation generators.

Submission on Accelerating Smart Meter Deployment, Draft Determination

The Australian Energy Market Commission (AEMC) sought submissions on a published a draft determination and draft rule for the Accelerating smart meter deployment rule change.

Smart meters are essential for effective integration of consumer energy resources (CER) in Australian households and small businesses, providing increased visibility and control for consumers over their electricity consumption and energy bills. The CEC is supportive of the core and supporting reforms proposed in the draft determination, aimed at maximising consumer benefits and increasing data visibility for distribution businesses.

The intended fast-track rule change ensures the proposed 2030 universal smart meter deployment target is achievable and the CEC believes this change will provide increased benefits to both consumers and industry.

Submission on the Climate Change Authority’s Targets, Pathways and Progress issues paper

The Climate Change Authority invited Australians to have their say on 2035 emissions reduction targets to be included in Australia’s new Nationally Determined Contribution (NDC) under the Paris Agreement.