List of recommendations

Recommendation 1

3.142

The Committee affirms the importance of resolving policy uncertainty in relation to emissions reduction in the electricity sector. The Committee commends to the House the establishment of a stable and enduring mechanism for scalable emissions reduction in the electricity sector, with appropriate notice given for changes in targets.

Recommendation 2

3.146

The Committee recommends that the Minister for the Environment and Energy, through the Council of Australian Governments Energy Council, investigate new market, non-market, and regulatory, approaches to maintaining an adequate level of flexible, dispatchable capacity in the National Electricity Market.

Recommendation 3

3.151

The Committee recommends that the Minister for the Environment and Energy, through the Council of Australian Governments Energy Council, investigate new market, non-market, and regulatory approaches to maintaining an adequate level of system security services in the National Electricity Market.

Recommendation 4

3.163

The Committee recommends that the Minister for the Environment and Energy, through the Council of Australian Governments Energy Council, identify and implement changes to improve the responsiveness of the rule-making process in the National Electricity Market.

Recommendation 5

3.168

The Committee recommends that the Minister for the Environment and Energy, through the Council of Australian Governments Energy Council, authorise the Energy Security Board to provide a briefing to the Committee every six months, until otherwise agreed by the relevant committee. The briefings should provide information on the state of the National Electricity Market, progress implementing the recommendations of the Finkel review that have been accepted by the Council of Australian Governments Energy Council, and any other relevant matters.

Recommendation 6

4.65

The Committee recommends that the Minister for the Environment and Energy, through the Council of Australian Governments Energy Council, undertake a review of past and current subsidies and incentive schemes to inform the design of future schemes to ensure they are appropriate for a modern electricity grid.

Recommendation 7

4.66

The Committee recommends that, independent of the Regulatory Investment Test for Transmission (RIT-T) process, the Australian Energy Market Operator be funded to undertake further feasibility studies to ascertain whether:

additional interconnectors are required on the grid and, if so, where; and

additional transmission is required in certain areas of the grid, including appropriate planning for renewable energy zones.

The Committee also recommends that the relevant rules, including the RIT-T process, be reviewed to take into account:

future expansion of the base for generating electricity; and

emissions reduction in the electricity sector.

Recommendation 8

4.67

The Committee recommends that system security services necessary for grid stability be ascribed a value that encourages investment in those services, with the Australian Energy Market Operator provided with the authority to take any steps necessary to ensure that there is a sufficient supply of system security services available.

Recommendation 9

4.108

The Committee recommends that the Minister for the Environment and Energy take to the Council of Australian Governments Energy Council a proposal that all of the National Electricity Market states refer reliability regulation to the Australian Energy Market Operator, in keeping with the Victorian approach, and operate under the customer value of reliability model.

Recommendation 10

4.109

The Committee recommends that the Minister for the Environment and Energy audit large scale industrial manufacturing processes to identify short-term and long-term opportunities for demand response and energy efficiency.

The Committee expects that these opportunities will result in possible future revenue streams for industry and may avoid the need for investment in additional generation and transmission capacity.

Recommendation 11

4.110

The Committee recommends that the Minister for the Environment and Energy update resources that promote energy efficiency in small industry and businesses.

Recommendation 12

4.111

The Committee recommends that the Australian Energy Market Commission review any rules preventing users at the edge of the grid from being serviced via alternative means, whilst safeguarding reliability requirements and associated customer protections.

Recommendation 13

4.131

The Committee recommends that the Australian Energy Market Operator work with retailers to ensure bills are dynamic, providing customers with control over how much information they receive in relation to cost and usage.

Recommendation 14

4.132

The Committee recommends that the Australian Energy Market Operator:

review how grid costs are recovered with a view to improving equity; and

address how consumer led initiatives are affecting the use of the grid and the potential effects this has on users remaining on the grid who are unable to access these options;

without discouraging the uptake of renewable energy.

Recommendation 15

4.133

The Committee recommends that the Australian Energy Market Operator investigate the benefits of virtual power plants and other trading platforms that may have an effect on demand management and consider how they can be incorporated into the electricity grid to assist with stability.

Recommendation 16

4.160

The Committee recommends that the Minister for the Environment and Energy review the Australian Energy Market Operator’s current planning role with a view to incorporating a distribution planning role that enables planning along the National Electricty Market. In the alternative, the Committee recommends the establishment of a new independent planning body for the National Electricity Market.

The Committee also recommends that the Australian Energy Market Operator, utilising its current transmission planning functions, consider the establishment of renewable energy zones.

Recommendation 17

5.26

The Committee recommends that the Australian Energy Market Operator review the mechanisms available to achieve appropriate generation capacity, including capacity markets, greater generation and enhanced planning.

Recommendation 18

5.54

The Committee recommends that the Australian Energy Market Operator consider the appropriateness of a roll out of smart meters to all National Electricity Market users, ensuring that the costs of installation are borne by the beneficiaries with issues of equity accounted for.

Recommendation 19

5.61

The Committee recommends that the Australian Energy Regulator review concerns about rebidding practices in New South Wales during 2017.

Recommendation 20

5.69

The Committee recommends that the Australian Energy Market Commission expedite the introduction of a five minute settlement period in the National Electricity Market, so that this rule change commences sooner than 2021.

Recommendation 21

5.70

The Committee recommends that the Australian Energy Market Commission and the Australian Energy Market Operator consider the implications of real-time settlement in the National Electricity Market, and immediately commence consultation with industry, with a view to expediting any possible future rule change to this effect.

Recommendation 22

5.76

The Committee recommends that the Australian Energy Regulator review the issue of vertical integration in the generation sector and market concentration in the generation sector, with a view to considering ways to ensure that standalone retailers have sufficient access to risk management products and fairly priced wholesale electricity.

Recommendation 23

5.87

The Committee recommends that the Australian Energy Market Commission conduct reviews of the Regulatory Investment Test for Transmission, the Regulatory Investment Test for Distribution and the Rules relating to

investment in more interconnectors with a view to capturing benefits of additional interconnectors to non-adjacent states; and

new connections to the grid.

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