PIAC lodged a submission to the AEMC’s consultation paper on the Coordination of Generation and Transmission Investment (COGATI).
The National Energy Market (NEM) is in the middle of a transformation from an energy system relying primarily on centralised, fossil-fuel generation with passive demand, to one with a low- or zero-emission generation fleet interacting with more sophisticated and active demand-side behaviour. This investment must be balanced against the cost pressures facing many households.
The current regulatory framework is designed to deliver efficiency of incremental investment. However, the transformation the NEM is currently going through is not incremental – it is a step change. What is needed is a planning and investment framework which delivers efficiency for strategic, whole-of-system investments.
PIAC has identified three objectives that the regulatory framework for delivering centralised generation and transmission must deliver to barriers which prevent them being achieved in the current framework and to a range of solutions and reforms to address. The framework must:
- Identify the most efficient system-wide solution.
- Deliver the solution in a timely and efficient way.
- Recover costs for the delivered solution in the fairest and most equitable way.