PIAC responded to the Australian Energy market Operator’s (AEMO) consultation on calculating competition benefits in Integrated System Plan (ISP) analysis.
We recommend against including competition benefits calculated using the method proposed in the ISP modelling. We consider they are too uncertain to include and should remain excluded. PIAC also does not think it is too late, given the draft 2022 ISP is due to be published in December, for the discussion of competition benefits.
Our reasons for not including competition benefits were:
- The simplified approach proposed was not sufficient and would result in highly uncertain outputs which should not guide large transmission investment decisions.
- The modelling assumptions proposed were not necessarily accurate or robust.
PIAC also stressed the inclusion of highly uncertain competition benefits could justify network projects which may otherwise not produce net benefits.
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