Project EnergyConnect (PEC), due to be completed by October 2026, will lead to the first transmission loop in the National Electricity Market. This new loop is expected to cause more frequent accrual of negative inter-regional settlement residues (IRSR) from counter-price flows than across existing, radial interconnectors.
We support the Australian Energy Market Commission (AEMC)'s proposal of ‘netting off’ to deduct negative from positive IRSR before paying settlement residues for interconnectors that are part of transmission loops. We expect fixing this issue will result in material savings for consumers.
We welcome AEMC’s suggestion of a review of IRSR arrangements. The review should take place one year after PEC is included in the National Electricity Market Dispatch Engine (NEMDE), given the potential for material consumer impacts with a transmission loop, as long as this allows for sufficient data to be collected to make an accurate determination of how well the arrangements are working.
We support AEMC’s proposed scope for this review to be broader than IRSR for transmission loops, and have recommended additional considerations for determining whether the IRSR arrangements are working to provide the best outcomes for consumers.
