AEMC tweaks grid connection rules to relieve project backlog

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The Australian Energy Market Commission (AEMC) has published a final rule to speed up grid connections for new renewable energy generation and storage, following extensive industry collaboration and a rule change request by the Clean Energy Council (CEC).

The CEC said there were issues causing long delays and creating investment uncertainty, due to a lack of clear obligations and timeframes identified in the connections process.

Known as the R1 assessment, the rule requires generators and large-scale storage providers to demonstrate they can meet performance standards before being registered in the National Electricity Market (NEM).

The new rule includes the removal of unnecessary barriers to timely connections, reducing the likelihood of additional engineering work and clearer obligations on both the connection applicants, as well as the Australian Energy Market Operator (AEMO) and network service providers (NSPs).

AEMC Chair Anna Collyer said the final rule strikes the right balance for the transition.

“With nearly 600 renewable energy generation and storage projects currently in the connection queue, it is critical that we speed up the process without compromising system security,” Collyer said.

“The final rule will help bring safe, clean and more affordable electricity to Australian homes and businesses sooner, and it also aims to create greater certainty for the future clean energy investors that are needed to reach the nation’s emissions reduction targets.”

Additionally, there is an increased focus on transparency during the R1 assessment, that will require AEMO to update its registration information resource and guidelines.

AEMO’s 2024 Integrated System Plan (ISP) says 6 GW of new capacity needs to be added annually to replace retiring coal-fired plants and achieve emissions reduction targets.

Growth in new generation and storage capacity is occurring simultaneously with an increase in the number of projects in the connection queue: from 389 projects in July 2022 to 593 projects in March 2024.

The AEMC’s new rule is hoped to improve investment certainty in the R1 process by addressing several gaps and hindrances to timely connections.

The rule commences on 11 July 2024, with AEMO required to update its registration information by no later than 1 March 2025.

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