VicGrid is reviewing the framework used to allocate the costs of the transmission network between network users for the 2028–33 regulatory period. Victoria's electricity system has changed significantly in recent years. New renewable energy generation, battery storage, electrification and emerging technologies are changing the demand for the network.
VicGrid is considering replacing flat transmission charges with peak and off-peak prices to encourage consumers to shift their energy consumption across the day and help keep transmission costs down in the long-term.
In our submission to VicGrid, we support the objective of making transmission charges more reflective of costs but urge a cautious and proportionate approach. Broad peak and off-peak pricing may not significantly change customers’ behaviour either because of limited operational flexibility (as with some large loads) or because other market signals are stronger. The approach could result in increased costs without improvements in network utilisation. We suggest more targeted measures, including capital contributions and critical or coincident peak pricing, with discounts when capacity is abundant, designed and developed with strong industry consultation.
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