The impact of climate change on generation and transmission in the Australian national electricity market

This paper aims to identify climate change adaptation issues in the Australian National Electricity Market (NEM) by assessing the robustness of the institutional arrangements that support effective adaptation from the supply side. This paper finds that three major factors are hindering or are required for adaptation to climate change: institutional fragmentation both economically and politically; distorted transmission and distribution investment deferment mechanisms; and lacking mechanisms to develop a diversified portfolio of generation technology and energy sources to reduce supply risk. Proposed solutions to the three factors are discussed. These proposed solutions are tested and examined in forthcoming papers