The Australian Energy Regulator (AER) today released its annual benchmarking reports for electricity distribution and transmission networks.
These reports analyse the productivity of distribution network service providers (DNSPs) and transmission network service providers (TNSPs) individually, and as an industry, in the National Electricity Market (NEM).
The benchmarking reports support the AER’s work in regulating electricity networks in the long-term interests of consumers and are used by us, and industry, to benchmark DNSP and TNSP performance over time and against other businesses and the economy.
Key findings in these latest reports include:
- In 2021, distribution industry productivity increased by 1.5% and transmission industry productivity decreased by 0.3%. These changes were against a backdrop of productivity reductions in the broader utilities sector and the Australian economy. There has been a general trend of increased productivity across distribution and transmission networks since 2016, where growth in these industries has been stronger than in the utilities sector or the Australian economy.
- Of the 13 DNSPs, 9 became more productive in 2021, primarily due to providing improved network reliability.
- Since 2006, there has been some convergence in the productivity levels of DNSPs. Since 2012, the New South Wales and Australian Capital Territory DNSPs have been among the most improved in the NEM.
- Of the 5 TNSPs, 3 became more productive in 2021, primarily due to providing improved network reliability. Offsetting these improvements and driving the overall reduction in productivity growth for transmission networks in 2021 was an increase in the overhead line capacity input. This was largely driven by a winter peak in 2021 and higher capacity being used for some of Transgrid’s existing overhead line assets.
The annual benchmarking reports also sets out both the benchmarking development work that is currently underway (relating to the impact of capitalisation differences and how export services may impact distribution benchmarking) and upcoming development work, as part of continuous improvement of our benchmarking tools.