Question

Discuss the process by which distribution network service providers undertake network investments in the NEM, and opportunities for demand-side options within this framework. ?200 words)

Answer 1

You will require this licence if you intend to operate a distribution network for supplying electricity on behalf of retailers. This licence will authorise you to supply electricity to retailers and registered participants under the National Electricity Law. Please note that a separate licence is required to act as a retail supplier of electricity.

To be eligible for this licence you must:

• Provide any information required by the Agency; and
• Pay the required fee.

Please consult the Contact Officer for more information regarding eligibility requirements.

Market mechanisms behind electricity utilities in the field of network operation services have earlier been studied with a focus on experienced costs, risks and benefits. However, the corresponding analysis is in this study performed for the counterparts of electricity utilities, that is, the service providers. The theoretical framework of the study is based on transactional cost economics. Further, findings of an empirical North-European service provider survey are presented and analyzed. Some reasons behind the identified market gap of control room services are discussed and future market development is examined. As one result of the empirical survey, service providers in the field of electricity distribution seem to be generally positive to the business model of offering control room services.

For a regulated transmission company, the rate of return on transmission investment is guaranteed.

For unregulated/merchant transmission company, you have to find a way to make money and make a profit. There are a few examples in the US. For example, a few DC ties from PJM into NYISO make money by charging whoever is using them on the contract basis. Say, you are a generator on PJM side and would like to send power to NY but would use that transmission facility. Then, you have to pay for its use. It is a bit risky business but there are ways to make money.

There are three main pricing paradigms: rolled-in methods, incremental methods and composite embedded/incremental (marginal) methods. But, in the following, major transmission cost allocation methods are introduced.

1) Postage-Stamp Rate Method

2) Contract Path Method

3) MW-Mile Method

4) Unused Transmission Capacity Method

5) MVA-Mile Method

6) Counter-flow Method

7) Distribution Factors Method

8) AC Power Flow Methods

10) Tracing Methods

The NEM is experiencing a time of change, driven by climate change policies and the emergence of new technologies. By changing the economic drivers for investment in renewable and gas-fired generation, these policies are expected to shift the generation mix from a reliance on coal-fired generation towards less carbon-intensive generation sources. A number of non-traditional technologies are also emerging as potential suppliers of electricity to the NEM, including photovoltaic (PV) and geothermal generation. Carbon capture and storage may also become viable. Together, these technologies have the potential to develop further through government funding programs that aim to improve the long-term technology development and commercialisation of low-emissions technology. Various initiatives will also gradually change the nature of demand in the medium-long term. This is due to the potential for new technology, such as smart meters, smart grids and electric vehicles, combined with an increased focus on energy efficiency to alter consumption patterns and reduce growth rates.

I hope that the information above provided is by looking and understood and then represented here. Please message me if still, any doubt is there for the above question.