AEMO Draft 2022 Integrated System Plan review

Share on twitter
Share on linkedin
Share on facebook

On 10 December 2021, the Australian Energy Market Operator (AEMO) published the Draft 2022 Integrated System Plan (ISP) (Draft ISP). This was subject to a ‘transparency review’ by the Australian Energy Regulator (AER), released 7 January 2022.  The Draft ISP is now in the consultation stages, prior to final publication in June 2022.

What is it?

The Integrated System Plan (ISP) is a document published every two years, that sets out a 30 year plan for development of Australia’s electricity system in the National Energy Market (NEM). It describes the challenges faced in the NEM and sets out an “optimal development path” on how to respond to such challenges.  The Draft ISP seeks collaboration and input from stakeholders to get an accurate picture of the state of the market, and the final ISP is used to “assist governments and industry to plan, invest and develop policy to support consumers’ current and future energy needs”.

What did the Draft ISP say?

The Draft ISP calls for significant investment in the NEM in the areas of generation, storage, transmission and system services.  The 99-page document covered in detail:

  • Meeting the ISP’s challenge (purpose and challenges, and consultative modelling)
  • ISP Development Opportunities (including renewable energy capacity for net-zero targets)
  • Draft Optimal Development Path (an in-depth analysis of network investments needed)
  • Advancing the Draft Optimal Development Path (covering risks and limitations, and consultation process)

The document modelled four scenarios for a range of plausible futures, and the most likely was identified as the “Step Change” scenario, describe as a “rapid consumer-led transformation of the energy sector and co-ordinated economy-wide action”.  The practical implementation of the Step Change scenario includes the following actions identified by AEMO:

The Step Change (Central) scenario anticipates a transformation of the NEM to 2050 including: A near doubling of electricity consumed from the grid, to 330 terawatt hours (TWh) as transport, heating, cooking and industrial processes are electrified.Construction of nine times the NEM’s current utility-scale wind and solar generation capacity (from 15 GW to 140 GW).Installation of four times the current distributed PV capacity (from 15 GW to 70 GW), with most coupled with an energy storage system.Treble the firming capacity that can respond to a dispatch signal (including 30 GW at utility scale.) Enabling this efficient transition for the NEM is forecast to deliver $29 billion in net market benefits, returning 2.5 times the investment value.

What did the AER transparency review say?

The AER transparency review was conducted to ensure that AEMO sufficiently explained the inputs, assumptions made, and how these resulted in the conclusions and outputs of the Draft 2022 ISP Report.  It found that for the most part, the explanations were sufficient, however some specific situations were identified where the report could benefit from further clarification to improve transparency. These will be included as an addendum to the Draft ISP, and available for consultation.

What are the next steps?

AEMO is accepting written submissions until 11 February 2022.  To answer stakeholder questions, AEMO will host a public forum on 1 February 2021.  It you are interested in attending, you can register with AEMO here.

More to explorer

solar energy

Review of the Authorisation and Exemption Framework

The Australian Energy Regulator has published a consultation issue paper titled Retail Authorisation and Exemption Review. Broadly, the Issues Paper considers the changing nature of the energy market, the risks posed by new products and services, and asks whether changes are needed to the Retail Authorisation and Exemption Framework. This is a major consultation that will have long-lasting ramifications for the energy market and consumers.  It builds on the work of the Energy Security Board, the Australian Energy Market Commission (particularly in relation to embedded network regulation) and prior work by the AER.

Sales manager

Managing the compliance of contractors

In many industries, a principal will be liable for any non-compliance by their contractors. What are some of the steps you can take to manage contractors?

Leave a Reply

Your email address will not be published.