The AER yesterday released the final updated Transmission Ringfencing Guideline.
The final guideline largely adopts positions from the consultation draft and requires TNSPs to comply with ringfencing obligations for both prescribed and negotiated transmission services.
In particular, a new key obligation for TNSPs is to not discriminate in the provision of negotiated transmission services. Of note, the AER’s view in the explanatory memorandum is that this new requirement does not automatically require a TNSP to unbundle combined negotiated and non-regulated service offerings (which is a common approach in the current market).
The review was widely commented on by parties across the industry, and views within the industry continue to be largely polarised as to whether this change will benefit the energy transition.
However, the rationale for change from the AER is “given the scale and pace of the energy transition, and the substantial number of generators that will need to be connected to the NEM in the near future, expanding ring-fencing arrangements will improve competition and in turn should drive cost efficiencies in the connection of new generating capacity”.
TNSPs are required to comply with the Guideline by 24 August 2025.
