With the rapidly falling cost for new renewable generation, Australia’s energy sector is in transition. Almost 50 GW of new generation wants to connect to the National Electricity Market over the next decade. Naturally enough, new power plants want to locate where there is plenty of wind or sun.
But the existing transmission system was built for a completely different power system, sending power from a small number of coal and gas deposits to urban and industrial centres. Optimising investment in the transmission infrastructure needed to support new renewables is vital to keep overall consumer costs as low as possible.
The Australian Energy Market Commission (AEMC)’s Coordination of Generation and Transmission Investment (COGATI) Review is right to consider this issue. But its proposed reforms are heading in the wrong direction. They would add significant and unnecessary complexity to the market, without improving investment coordination.
Following a request from Origin Energy, Castalia has come up with a simpler and more effective approach to transmission pricing and the energy transition in Australia.
As David Leitch from Reneweconomy says:
“Do yourself a favour and read the Castalia report appended to the Origin Energy submission. This report is the best piece of writing on the topic of electricity transmission I have ever read. It expresses exactly the way I think about the topic, but far more authoritatively… an unbiased report from an organization with no skin in the game.”
Read the RenewEconomy article here.