The document discusses the need for smart regulation to enable Australia's transition to a 21st century renewable energy system. It notes that coal generation will decline substantially by 2036 as wind and solar increase significantly. Large renewable energy zones have been identified in NSW, VIC, and SA that could support over 25GW of new wind and solar generation. However, ongoing regulatory reviews have paralyzed progress, unlike Texas which established renewable energy zones and transmission to unlock over 18.5GW of low-cost wind power. Smart long-term regulation and planning is needed to guide Australia's energy transition and reduce high consumer prices.

1. Smart Regulation for a 21st Century Energy System
Paul Italiano – CEO, TransGrid
CEC Australian Clean Energy Summit
18 July 2017

2. Australian Clean Energy Summit2 /
Unlocking Australia’s Energy System of
the Future

3. Backbone of the Australian National Electricity Market
Australian Clean Energy Summit3 /
NSW
QLD
SA
TAS
VIC
• The NEM encompasses five interconnected regions: NSW, Queensland, Victoria, Tasmania and South Australia
• NSW represents 32% of Australia’s population, 34% of energy consumed in the NEM and is one of only two
states with a AAA credit rating

4. Disruption at the source of energy
Australian Clean Energy Summit4 /
The Australian Energy Market
Operator (AEMO) projects:
• Coal generation will reduce from
74% of National Electricity Market
(NEM) generation in 2016–17, to
24% in 2035–36.
• Wind and solar currently account
for around 5% of the generation in
the NEM.
• Australia will need to connect up to
22 GW of new large-scale wind
and solar generation before 2036.

5. TransGrid Advisory Council - June 20175 /
Australia’s renewable
energy potential
• The tristate border regions of New South
Wales, Victoria and South Australia are
home to geographic characteristics
which create an immensely attractive
zone for large scale, renewable energy
developments.
• Areas in western New South Wales
receive significant and consistent solar
exposure, and have land use mix that
would enable the installation of large-
scale solar PV generation.
• Conversely, north western Victoria has a
number of highly prospective pockets of
high-wind speeds which would support
commercial wind generation.

6. Australian Clean Energy Summit
Solar penetration in the German market
6 /

7. Australian Clean Energy Summit7 /
3,000MW of wind
in the area near
the NSW-South
Australian border
6,000MW of
solar PV near
Broken Hill in
New South
Wales
5,000MW of
solar PV
between
Buronga and
Hay in South-
Western New
South Wales
3,000MW of wind
in north-western
Victoria
3,000MW of wind
near Broken Hill
5,000MW of
solar PV near
Tamworth in
Northern New
South Wales
5,000MW of
solar PV near
Wellington and
Wollar in New
South Wales
Central West

8. Australian Clean Energy Summit
Network configuration – Current (in construction)
330kV
Transmission line
Connection point
Proposed transmission line
Proposed substation
Existing substation
8 /
132 kV Transmission line

9. Australian Clean Energy Summit
Network configuration – Renewable Energy Hub connection
330kV
Transmission line
Connection point
Proposed transmission line
Proposed substation
Existing substation
132 kV Transmission line
9 /

10. The Texas example
Australian Clean Energy Summit10 /
• More than 7,000MW of wind capacity installed in Texas from 2006-09
• Grid experienced significant constraints, resulting in curtailed generation.
• Public Utility Commission of Texas established five "competitive renewable energy zones"
and authorized transmission expansion projects that in total would allow 18,500 MW of wind
power to be transported across the state
• These transmission projects led to a significant decrease in wind curtailments and wholesale
prices.
• As of the end of 2013, the scheduled program completion date, all of the CREZ projects had
been energized, at a total cost of $7 billion.
Source: US Energy Information Administration

11. Reduction in curtailed generation and lower prices
Australian Clean Energy Summit11 /
Source: US Energy Information Administration

12. The paralysis of ongoing regulatory reviews
Australian Clean Energy Summit12 /
• Since 2013, the NEM has experienced:
 49 Market Reviews and Advices
 98 proposed rule changes
 13 Reviews by the AER
Source: AEMC, AER

13. State of play in Australia
Australian Clean Energy Summit13 /
1. The world’s biggest resource of energy in proportion to population
2. Astoundingly high energy prices for consumers
3. A plethora of ongoing reviews and enquiries
4. No coherent goal to work toward as an industry