AGL has responded to the Australian Energy Market Commission draft rule determination on the efficient management of system strength in the NEM. The rule proposes to evolve the existing ‘minimum system strength’ framework into a broad system strength standard, to introduce two new generator access standards, and to introduce a System Strength Mitigation Requirement (SSMR) charge as an alternative to the existing ‘do no harm’ obligation for connecting generators. AGL broadly supports the draft determination however we have suggested that tenders for the provision of system strength be subject to a transparent competitive procurement process, so that the different options available for remediation are determined by the market rather than just the relevant Transmission Network Service Provider. We support the introduction of the SSMR charge as an alternative to the ‘do no harm’ obligation for connecting generators as we expect it will reduce costs and encourage entry for new connecting generators in the NEM.

AGL’s full submission is available here.