Australia must improve investment signals for renewables

“We desperately need new renewable and storage investment, but this isn’t much help if those new assets can’t get their power to market. We need to strike a balance between bringing on new renewable investment and protecting existing renewable generators’ ability to get their power onto the grid – many of which are already facing negative economic outcomes due to congestion. ”

Congestion occurs when transmission lines are unable to transfer power to meet consumer demand, such as when there is more energy being generated in a location than the grid can transfer.

This congestion makes it harder to export energy and can reduce competition in the wholesale energy market. This, the CER said, ultimately translates to higher prices for consumers and can even have reliability impacts.

The CER said a solution was a so-called Congestion Relief Market (CRM), which would allow generators to trade their way around congestion, and in the process create additional revenue opportunities, reduce spilled energy and incentivise battery storage.

The CER said improving standardization and consistency of information flows between network service providers, generators and market bodies was also needed.

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