Planning and Forecasting 2019 Consultation Process Briefing Webinar Wednesday 3 April 2019
Agenda Welcome and overview Summary and analysis of submissions Next steps Time for clarification 1
Welcome and overview 2
Today’s facilitation team and participants Facilitators Participants Angela a Taljaar ard, , ACCC Clare re Giacomant antoni nio, , EY • • Trish h Auld, , Adani Tarek rek Alsamp ampai aile, , FRV • • Nicola ola Falcon lcon Oliver Nunn, n, AEMC Umer Siddique ue, , FRV • • General Manager, Adam m Day, , AER Prajit Param ameswar war, , Hydro Tasmania • • Forecasting, AEMO Jacque Ja ueline ne Bridge, , AusNet Vedran an Ko Kovac ac, , Hydro Tasmania • • Ben Skinne ner, , Australian Energy Council David Headberry, , Major Energy Users • • Lillian Patter terson, n, Clean Energy Council Tom Hare, re, North Queensland Bio-Energy • • Pete ter r Wormwal mwald, , Delta Energy Susan an Cunning ngham, ham, NSW Treasury • • Andrew ew Turley ley Terrenc nce Hogan, , Department of the Environment Alex x Fattal al, , Origin Energy • • Manager, Integrated Energy and Energy Chris Lim, PIAC • Systems, AEMO Tyson Vaughan, an, Enel • Enrique ue Monti tiel, , Powerlink • Jill Cainey, , ENA • Samuel Oosterho holt, t, SA Power Networks • Jillian Vanderstoep, , Energy Queensland • John Sligar, , Sligar and Associates • Justi tin Gardne ner, , Energy Queensland • Joe Hemingway way, , Stanwell • Phil l Hirsch chhor orn Craig Pollard rd, , Energy Queensland • Bradley y Woods, TasNetworks • Senior Partner and Managing Donovan an Marsh, h, Energy Security Board • Dev Tayal al, , Tesla Director, BCG • Ron Logan, , ERM • Michae ael Vawser, , Total Eren • Nick Cutler, , EY • Lulu Shao, , Transgrid • 3
AEMO is committed to continually improving our suite of planning publications to better meet stakeholder needs We respect your expertise and value all feedback, which is critical in guiding meaningful progress and developing a strategic vision for the future development of Australia’s energy system 4
Today’s webinar is part of our broader stakeholder engagement and consultation process 5 Feb 20 Mar Date te TBC Forecasting and Submissions on Final scenario and Delive verab rable les planning forecasting and assumptions consultation planning report published published consultation Feb Feb Mar Apr 19 Feb 3 Apr 12 Apr Date te TBC Stakeholder Briefing webinar to Stakeholder Potential Engagemen ents s and workshop to summarise workshop to additional consultat tation ions address questions submissions finalise scenarios stakeholder of clarification and resolve issues workshop Toda day 5
We have taken steps to ensure this consultation process is objective and rigorous An objective lens A rigorous approach • Engaged BCG to support in analysis of • Submission analysis approach employed submissions and workshop design an academic qualitative research methodology • Deep expertise within the energy sector, as well as in process design and analysis • All submission content was thematically coded to a node structure using industry standard qualitative data analysis software 6
Thank you for your participation in Workshop 1; we have taken on board your feedback Key takeaways Actions taken Improve the narratives that support • We have designed Workshop 2 so that a core element is further developing each scenario the narratives of the scenarios • Additional scenario material is also being developed to support the scenario narratives Consider role of policy in scenarios • Consistent with themes of written submissions and modelling • Response being considered A range of feedback on inputs, • Consistent with themes of written submissions assumptions and material issues • We address some areas in this session and other areas are being considered • We have also designed elements of Workshop 2 specifically to address certain areas of concern Increase transparency of • We have publically published submissions received in this process submissions process • We are holding this Webinar to play back our findings to prepare all stakeholder for Workshop 2 7
Provide a high-level summary of the 1 submissions received in order to frame areas of agreement, contention and uncertainty Objectives for Prepare participants for key areas related 2 today’s session to the activities of Workshop 2 Ensure AEMO has accurately understood 3 stakeholder submissions Note: The purpose of today's session is not to be a forum for debate of the accuracy or veracity of submissions 8
Summary and analysis of submissions 9
Summary and analysis of submissions Overview and main themes 10
AEMO received 24 written submissions Network Service Generators and Retailers Providers Other Consulting Firms 11
Content within the submissions was analysed and synthesised into four broad topics Topic ic 1 — Approach to Engagement, 15 Organisations responded A number of main Topic ic 2 — Approach to Scenarios, 17 Organisations responded themes emerged Topic ic 3 — Inputs and Assumptions, 24 Organisations responded • Generation and Storage, 24 Organisations responded • Networks, 13 Organisations responded • Consumption, 10 Organisations responded • Cross value chain, 9 Organisations responded – E.g., resilience modelling and system strength Topic ic 4 — Other Topics, 7 Organisations responded 12
10 main themes emerged from the analysis Theme Frequency Consensus - The consultati ation n pro rocess and the efforts being made to increase engagement with stakeholders are positive High High Emissions ns re reduc ucti tion n modelling ng needs to explicitly incorporate policies and account for stricter trajectories High High 1 The current scenar arios do not sufficiently capture the range of possible energy futures High Medium 2 The modelling of generator rator re retireme ments ts needs to account for earlier retirements, and be based on more 3 High Medium than technical retirement age 4 Improvements can be made to the Distr tributed uted Energy y Resour urces modelling approach High Low A commercial discoun unt t rate te should be used, as opposed to a social discount rate below the WACC Medium High 5 Increase the transparency and dynamism of Marg rginal nal Loss Facto tor modelling Medium Medium 6 The establishment of more Renewab able Energy y Zones and their modelling Medium Low 7 8 When modelling benefits, incorporate ancillary y benefits ts and services, or establish a market for these services Low High System tem streng rength th is an important issue and improvements need to keep being made in terms of how to Low Medium 9 incorporate it effectively into the models 10 Resilienc nce modelling ng approach: both HILP and mitigation options Low Low 13
High and medium frequency themes will be discussed in detail today Ancillary benefits Discount rate Emissions 8 5 • • 1 • Deep-dive on these and services reduction modelling themes High 9 System strength 6 MLF modelling Scenario modelling 2 • • • approach us ensus Generator retirement 3 • Consen Medium ium modelling Resilience modelling REZ modelling DER modelling 10 • 7 • 4 • Low Low Medium ium High Frequen equency cy 14
Summary and analysis of submissions Deep-dives on main themes 15
1 Theme 1: Emissions reduction modelling needs to explicitly incorporate policies and account for stricter emissions reduction trajectories 17 of 24 organisations responded: High frequency, high consensus Emissions reductions policies and targets are not explicitly considered within the scenarios Main issue “… AEMO should publish, consult on, and apply explicit emissions trajectories.” • raise sed “ … recommends AEMO clearly define policy settings in the core scenarios and consider potential • alternative mainstream emission policies.” Alter ternat native ives s Explicitly include emissions reduction Publish and consult on incorporated Model feasible alternative policies propose sed policies and targets as drivers targets to maintain apolitical approach AEMO is reflecting on our approach to modelling emissions reduction policies and targets. This area will be explored Implicat cation ions more in Workshop 2. 16
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