Directions paper 5 January 2021

Four areas of reform to benefit consumers have been prioritised for detailed design work before further consultation at the end of March.

The January 2021 Directions paper sets out the reforms to be pursued to the next stage of the ESB’s national electricity market redesign project. Detailed designs for each of the reforms will be developed for further consultation in March, before final recommendations are made to energy ministers in mid 2021.

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The directions paper follows the consultation paper released in September 2020 outlining the reform options under consideration as part of the post 2025 market design. The ESB received more than 100 submissions from a broad range of stakeholders commenting on the paper.

This paper sets out the consolidated reform directions that will be subject to detailed design work following consideration of this stakeholder feedback

During the next three months, the ESB will focus on the following areas:

  • Resource adequacy through the transition – ensuring the right mix of resources is available to the system to deliver reliable supply to customers.
  • Essential system services and scheduling and ahead mechanisms – ensuring those resources and services required to ensure we manage the complexity of dispatch and deliver secure supply to customers are available when needed.
  • Demand side participation – unlocking opportunities for households and businesses to make the energy choices that suit them best like shifting consumption to off-peak periods, installing more efficient appliances and investing in their own locally based generation or storage.
  • Access and Transmission – providing networks to meet future needs, arrangements for early implementation of renewable energy zones, and longer term arrangements to ensure efficient use of the national transmission network.

The post 2025 project involves the Energy Security Board (ESB), Australian Energy Market Commission (AEMC), Australian Energy Regulator (AER) and Australian Energy Market Operator (AEMO) working together across multiple workstreams with diverse stakeholders.

The project is undertaking a rigorous analysis of the challenges faced by the market, facilitating deep debate to explore and implement the best options while also identifying potential solutions for development.

Consultation has already been extensive, and this directions paper narrows the scope of possible solutions in response to stakeholder feedback to date. Some options presented in the September 2020 directions paper have been ruled out. Others put forward in the September 2020 consultation paper have been further refined in response to feedback and further analysis.

Consultation will continue in 2021.