Nexa Advisory welcomes the opportunity to provide input to the Commission’s Review of the Integrated System Plan (ISP) framework.
Nexa supports the ISP as the National Electricity Market’s (NEM) whole-of-system investment roadmap. It identifies the generation, storage, transmission and other resources required to maintain a secure, reliable and least-cost electricity system as ageing coal-fired generation retires. However, we reiterate that the key challenge across successive ISP cycles is the widening gap between what is planned and what is delivered on time and on budget. This ‘plan vs build’ implementation gap is not a critique of the ISP’s modelling ambition; it is a reflection that the transition now requires an implementation discipline that sits alongside the ISP. A least-cost roadmap on paper will not translate into least-cost outcomes for consumers if delivery falters, sequencing slips or substitute pathways are not developed early.
Nexa supports the ISP’s role as a national planning framework that has, over successive cycles, provided an important evidence base for investment decisions. Maintaining the ISP’s credibility is therefore critical. While governments remain responsible for developing and legislating policy, the ISP should continue to provide a robust, transparent and trusted whole-of-system outlook that informs those decisions and supports efficient investment across the transition.
However, given the scale of the delivery challenge – and its impact on consumer outcomes – Nexa recommends governments and market bodies progress reforms which complement the ISP to deliver the ODP as planned.
Separately, a recurring challenge across successive ISP cycles is the gap between what is planned and what is ultimately delivered. This Review should therefore focus on resolving implementation gaps, rather than initiating another cycle of incremental and overlapping framework reform.
Broader planning must be matched by a credible national actionability and delivery framework. Actionability should establish clear pathways, responsibilities and accountability for delivering major investments in line with the ODP.
Key asks
Nexa urges the AEMC to use this Review to close the gap between planning and delivery, while evolving the ISP to better reflect the changing electricity system. In particular, the AEMC should:
- Use SP3 as the starting point for reform, broadening the ISP to co-optimise CER, demand-side and distribution-connected resources where they can materially affect the timing, scale or need for major system investment.
- Do not extend ISP actionability to major regulated distribution investment (as proposed under SP4) unless and until the ENRR and related reforms have resolved underlying incentive and accountability issues, and a clear additional consumer benefit can be demonstrated.
- Strengthen AEMO–DNSP joint planning through the new DNDP framework, with two-way information flows, minimum public distribution network datasets and coordinated assessment of distribution investment, CER and flexible demand as substitutes for, or complements to, transmission and utility-scale investment. The DSOO should complement rather than duplicate these arrangements.
- Strengthen the actionability framework to create clear accountability for timely delivery. This should include clear responsibility for delivery outcomes, transparent project milestones, an enduring transmission cost and schedule register, appropriate materiality thresholds, and complementary performance-based regulation and contestable delivery for major projects.
- Make the consumer cost of delays visible, by requiring the ISP to quantify the consumer cost and emissions consequences where generation, storage and transmission are delivered more slowly than assumed in the ODP.
- Create a credible pathway for non-network and market-led options, ensuring NNOs are identified and market-tested early, supported by sufficient information and a transparent pathway from assessment through to procurement and delivery.
- Do not expand co-optimisation to include gas infrastructure (as proposed under SP5). Gas should continue to inform electricity planning where relevant, but the ISP should remain focused on the efficient development of the electricity system rather than become a central gas infrastructure plan.
- Make openness and transparency a core principle of the ISP, including publication of material modelling inputs, assumptions, sensitivities and outputs, together with accessible network datasets that allow stakeholders to test ISP conclusions and develop credible investment and non-network alternatives.
Read our submission here: Nexa Advisory submission – AEMC ISP Review Discussion Paper