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 from counter-price flows than across existing, radial interconnectors. This has led the Australian Energy Market Operator (AEMO) to propose a new way to manage the settlement residues. We support this proposal as a reasonable way to account for the introduction of a transmission loop.
AEMO has also identified an issue with the current application of automated negative residue management (NRM) leading to clamping and unclamping — or cycling — of interconnectors, resulting in the accumulation of negative residues in excess of the $100,000 threshold, which consumers ultimately pay for. We support both of AEMO’s proposed solutions to address this, and expect that fixing this issue will result in material savings for consumers.
