Submission: AEMC Review of the Integrated System Plan Framework

3 September 2026

To: Australian Energy Market Commission
Re: Review of the Integrated System Plan Framework

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input to the Australian Energy Market Commission (AEMC)’s Review of the Integrated System Plan (ISP) Framework.

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

IEEFA commends the Commission for considering the co-optimisation of both demand- and supply-side resources in the Australian Energy Market Operator (AEMO)’s ISP. In our view, this is a critical update that would significantly improve the utility of the ISP as a planning tool, and would increase confidence in its ability to provide a least-cost pathway for Australia’s energy transition.

Since the ISP was initiated, demand-side resources have emerged as a critical technology in increasing Australia’s renewable energy uptake. IEEFA does not consider it tenable for the ISP to continue to be a supply-side focused exercise.

The ISP’s actionability mechanism could be expanded to include demand-side resources. However, we believe an approach that focuses on broad, actionable recommendations for jurisdictional governments is more useful than the approach suggested by the Commission, which focuses only on actionable distribution network projects.

While there may be merits to co-optimising for gas alongside electricity in the ISP, IEEFA also note this carries risks, and may have limited value outside gas generation. For this reason, we consider this a lower priority than optimising for the demand- and supply-sides of the electricity sector.

Further details on our views are outlined below in response to selected consultation questions. Please do not hesitate to contact us to discuss these matters further.

Kind regards,

Jay Gordon – Energy Finance Analyst, Australian Electricity