Nexa Advisory welcomes the opportunity to provide input to the Commission’s Review of the Integrated System Plan (ISP) framework.
We have previously provided input directly into AEMO’s system planning consultations, calling for:
- a stronger, more explicit focus on transmission deliverability – including the gap between the modelled ODP and what can realistically be built on time and on budget, including the consumer costs of delays;
- stronger identification and assessment pathways for non-network options (NNOs) and market-led alternatives; and
- deeper integration of distribution and demand-side factors, progressing toward integrated distribution system planning and co-optimisation of CER, flexibility and network investment within the ISP.
However, these are areas which we consider are not being progressed by AEMO and market bodies at the pace required for the transition.
Additionally, as the ISP functions as the NEM’s investment roadmap, its credibility depends on it not operating as a “black box” – stakeholders must be able to see, test and challenge the analysis that drives the conclusions of the ISP. Nexa supports an open modelling approach of AEMO publishing inputs, core assumptions and modelling outputs underpinning ISP results.
As such, we urge the Commission to use this Review to progress reforms that make the Optimal Development Path (ODP) genuinely actionable and deliverable, progressing the below reforms as part of the ISP and other relevant system planning frameworks:
- Make openness and transparency a core principle of ISP modelling – require AEMO to publish the key inputs, assumptions and outputs underpinning ISP conclusions. For example, AEMO should provide clearer transparency on coal operating assumptions and methodology (e.g. two-shifting and end-of-life outages) and gas infrastructure costs, supported by accessible network datasets (especially for distribution).
- Require AEMO to quantify the cost of delays to consumers – further building on the recently introduced Constrained Delivery sensitivity to provide a clear representation of outcomes when the ODP is not delivered on time.
- Establish a transmission cost and schedule register – require AEMO (working with AER as needed) to maintain and publish an updated, enduring register for committed/anticipated ISP transmission projects that tracks cost and timing changes across delivery stages, reconciles movements against the expected dates/costs included in previous ISP iterations, and summarises key drivers of change to improve transparency and accountability.
- Require AEMO to quantify the cost of coal unreliability and uncertainty due to closure date extensions – signalling the consumer cost impacts of ad hoc coal extensions and the need for an orderly, credible coal exit mechanism to underpin investable replacement pathways. To do this, the ISP’s modelled scenarios must reflect increasing unplanned outages of ageing coal assets.
- Reform the actionable ISP economic assessment framework to encourage performance-based regulation – so regulated transmission proponents face clear accountability for on-time, on-budget delivery consistent with the ODP.
- Ensure credible non-network options and market-led alternatives are treated on equal footing to network options in the ISP and economic assessment. This includes virtual transmission and other flexible solutions that can be delivered faster and with a smaller footprint.
Read our submission here: Nexa Advisory submission – AEMC ISP Review