Clean Energy Council submission on Electricity Transmission Service Standards Incentive Scheme

The Clean Energy Council agrees that the market impact component (MIC) and network capability component (NCC) of the Service Transmission Target Performance Incentive Scheme (STPIS) need to be reviewed. We also agree with the Australian Energy Regulator’s (AER) analysis that indicates the MIC is not working as intended and the NCC is being under-utilised. The CEC recommends the AER pursue a fundamental redesign of the MIC, to reflect its impact on renewable generation and storage revenues and investment more broadly. Spot price effects are no longer the best indicator of long run market impact and consumer costs. Instead, we consider that generator revenue impacts, and consequential impacts on investment efficiency, should form the basis of the MIC. The CEC strongly supports the continuance of the NCC as a core component of the STPIS. There is, and will continue to be, a very high value to consumers from technological improvements in how the grid is managed, particularly any measures that can be used to increase utilisation and optimisation of the available network.