Stage 4 - Contracts
Having received a complete application to connect, AEMO prepares an offer to connect. Where an augmentation to the Declared Shared Network (DSN) is required, the contracts required to effect the connection can be quite complex. The Use of System Agreement (UoSA) documents AEMO’s offer to connect, which is usually accompanied by a number of other contracts in executable form and which meet the formal requirements for connection and network agreements (amongst others). Their number, form, and the time taken to execute will vary depending on:
- Project size.
- Plant type.
- DSN augmentation requirement.
- Contestability of the proposed augmentation.
For projects that don’t require an augmentation to the DSN, AEMO will usually execute two contracts (see Figure 1):
- UoSA with Connection Applicant.
- Network Services Agreement (NSA) with the incumbent Declared Transmission System Operator (DTSO).
Figure 1: Contracts for a project that doesn’t require augmentation
For projects that require augmentation to the DSN and consist of contestable works and non-contestable works (e.g. interface and other minor and non-separable works) there are two alternative ways to develop the required augmentation:
- AEMO selects the parties to build, own, and operate the shared network. AEMO conducts an invitation to tender (ITT) to choose the contestable service provider, and organises the non-contestable portion of the works under clause 8.11.7 of the National Electricity Rules (Rules); or
- The Connection Applicant nominates a DTSO to build, own, and operate the augmentation, and AEMO procures shared network services from the nominated DTSO. The Connection Applicant conducts an ITT for the contestable portion of the augmentation under clause 8.11.8 of the Rules.
AEMO determines whether the augmentation is contestable or non-contestable.
The contract structure for a contestable project is independent of who selects the party to build, own, and operate the augmentation. The contract structure is shown in Figure 2.
For a non-contestable DSN augmentation, the incumbent DTSO will build, own and operate the augmentation. The contract structure is shown in Figure 3.
Figure 2: Contracts structure for a contestable project requiring augmentation
Figure 3: Contracts for a non-contestable project requiring augmentation – incumbent DTSO builds, owns and operates the augmentation (Lease & Easements required if assets are to be situated on land not owned by the DTSO)
AEMO: executes required contracts with incumbent DTSO, the Connection Applicant and selected DTSO (if contestable).
Connection Applicant: executes contracts with AEMO and other parties, as necessary.
At this stage you may find the following documents useful:
- Contract Principles: Generation Connections to the Victorian Declared Shared Network
- AEMO's Asset Classification
- Guidelines for Shared Transmission Connections in Victoria
- Guidelines for Establishing Terminal Stations In Victoria
- Connecting Generator Clusters to the Victorian Electricity Transmission Network: a Technical Perspective
- AEMO’s Contractor Panel page
- Indicative Transmission Augmentation Costs in Victoria
- Cost Allocation Policy for Victorian Terminal Stations – Negotiated Transmission Services
- Cost Allocation Policy for Victorian Terminal Stations – Prescribed Transmission Services
- Application of RIT-T to multi-connection terminal stations (Victoria)
- Criteria for Assessing Material Inter-Network Impact of Transmission Augmentations
- AEMO’s Registration pages
- Transmission Generation Alterations in Victoria process map (145 KB, pdf)
- Victorian Negotiating Framework 1 April 2017 – 31 March 2022 (639 KB, docx)
For enquiries regarding connections, please contact firstname.lastname@example.org