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Perspectives on access

Perspectives on access. Jamie Lowe Manager, Market Regulation Australian Energy User 2012. Transmission investment framework. Access determined by reliability standards regardless of future connections. Uncertain access with future connection . Alinta Energy Generation Portfolio.

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Perspectives on access

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  1. Perspectives on access Jamie Lowe Manager, Market Regulation Australian Energy User 2012

  2. Transmission investment framework Access determined by reliability standards regardless of future connections Uncertain access with future connection

  3. Alinta Energy Generation Portfolio Alinta Energy Generation Portfolio Port Hedland 210MW Braemar 504MW Ongoing constraint &disorderly bidding Pipeline Pipeline Newman 178MW Leigh Creek Mine Inefficient -ve prices & poor locational decisions Lack ofinter-regionalfirmness Augusta Power Stations 780MW Pinjarra 280MW & Wagerup 380MW Bairnsdale 94MW

  4. How the status quo undermines efficiency

  5. Benefits of optional firm access Benefits of dispatch certainty Benefits of clear locational signals Benefits of improved inter-regional certainty New asset locational decisions should not undermine existing generation investments; revenue certainty; or degrade flow paths Inter-regional firmness will reduce need to inefficiently double up on SRAs and hedge contracts and enhance competition Firm access over the network underpins a investor’s ability to recover fixed costs of a long-life asset and reduces exposure to contract for difference payments Ensures transmission frameworks are better matched to recent experience, and expectations,of increased number of connections across the network i.e. renewables TNSP incentives to maintain networks andinter-connectors will increase competition and trade between regions and underpinnetwork investment which is better coordinated with new generation investment Allows use of physical hedge against mass market customers to a greater level of plant capacity and therefore reduce level of contractual cover andother products like insurance Alinta Energy would be morecomfortable investing under atransmission framework wherenetwork access for the life of the assest was known Would anticipate a lower level of market floor price events as bidding at -$1000 would risk being dispatched at that price more often than is presently the case

  6. Next steps Failure to resolve these issues will continue to undermine new entry, create risk and cost for existing generators and undermines competition which benefits consumers. The current system favours large vertically integrated portfolios who have a natural hedge over independent generation or new entry. The non-firm access model will not resolve these issues The status quo is not acceptable At a minimum disorderly bidding should be resolved The optional firm access model is supported in-principle by Alinta Energy Acknowledge that implementation issues need to be resolved Not convinced by current position on transition Planning arrangements have potential for simplification Certainty around charging is essential Access and charging arrangements, if uncertain at time of investment, can not be supported

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