Investment in solar and wind generation in Australia-lessons learned.

The Australian National Electricity Market (NEM) rules and arrangements were developed in the 1990s when the majority of the energy was generated from large thermal generating units that were relatively close to the major load centres. These generation and load centres are also interconnected to allow energy to be transferred and traded to improve reliability and efficiency. New generators have open access to the network provided they negotiate their connection with the network operator and meet acceptable performance standards. In the past decade changes in technology and climate change incentives have driven an evolution in the NEM rules and market arrangements. However, in recent years pace of change has increased and there has been a dramatic increase in the number of solar and wind generating systems installed and actively being assessed. These generating systems are smaller than the existing thermal generating units and are generally connected in more remote low voltage locations due to resource availability. The paper will discuss how the NEM has evolved under the high volume of concurrent connection applications, including: • the need to coordinate generation and network investment to avoid excessive congestion, including the role of the Australian Energy Market Operator's (AEMO's) integrated system plan; • the negotiation of performance standards in the presence of multiple concurrent connection applications, including the need for system strength remediation; • the impact on network losses and the associated loss factors used to provide locational investment signals. [ABSTRACT FROM AUTHOR]