On 14 July 2017, the Energy Council responded to the Finkel Review and agreed on a timeline to implement 49 of the 50 recommendations. These included a recommendation to develop a system-wide grid plan to inform network investment decisions. The planning recommendations were agreed to and the first Integrated System Plan (ISP) was published in 2018 by the Australian Energy Market Operator.
The ISP framework was an important step in enhancing system planning, particularly in the context of the transformations occurring in the NEM. Under this framework, AEMO publishes an ISP every two years.
Renewable Energy Zones
The rapidly changing mix of generation in the NEM has implications for electricity transmission networks. While the network was built to bring electricity from large generators to major cities and industry, new renewable generators will be built at different locations on the grid.
There is a need to better coordinate new generation and network build to make sure the system overall is built and used efficiently, and to minimise costs to energy users. Renewable Energy Zones (REZs) are a way to coordinate building renewable generation and storage, with matching transmission capacity. This will allow the NEM to take advantage of our renewable energy potential at the lowest cost.
The Energy Security Board (ESB) has developed arrangements to support the development of REZs in accordance with a 2-stage process:
- Stage 1 - rule changes that require the jurisdictional planner to develop a detailed and staged development plan for each priority REZ identified in the ISP. These changes build on the actionable ISP Rule changes
- Stage 2 - the development of a policy framework for the staged development of REZs within a REZ development plan.
The ESB’s final recommendations for the REZ Planning Rules were accepted by Energy Ministers in May 2021. The ESB has consulted on and recommended a set of principles for the implementation of REZs as part of Stage 2 of the process.
The ESB’s Stage 2 REZ recommendations provide a set of overarching principles for the development of REZs that is compatible with the efficient development of the power system as a whole, together with practical guidance on how to implement these principles. The principles will support development of REZs in a way that is more consistent and predictable. The principles cover:
- planning for REZs
- generators connecting to a REZ
- funding and economic regulations for REZs
- REZ-specific access regime.