Renewable Energy Zone stage 2 consultation paper 

PIAC made a submission to the Energy Security Board’s (ESB) second stage consultation paper on Renewable Energy Zones (REZ).

PIAC cannot support a solution that seeks to make only minor changes now and leaves solving the underlying issues that prevent REZs to the implementation of broader transmission access and pricing reforms. Addressing the underlying issues and delivering REZs in a timely manner are not straightforward problems, and simple solutions are unlikely to adequately solve them. Instead, any simple solution is likely to result in consumers bearing risks they cannot manage and inefficient cross-subsidisation between connecting parties.

PIAC welcomes the ESB considering the risk- and cost-sharing model for REZ funding, however we reject the ESB’s assessment of it. While alternative options exist to the PIAC model, these do not deliver the principles for risk allocation or cost recovery.

Compared to the status quo, PIAC’s model offers a more cost-effective way for generators to connect and lower risk. PIAC recommends the ESB adopt the PIAC risk- and cost-sharing model for REZ financing to reduce the risk borne by consumers and better allocate these risks to parties that can manage them.