Market Reviews: Open

2017 Energy sector strategic priorities

Reference:
EMO0032
Reviewed by:
AEMC
Initiated by:
SCER
Date initiated:
13-Jan-2017
Project Leader:
Michael Bradley
Overview

In December 2016, the COAG Energy Council tasked the Australian Energy Market Commission (AEMC) with providing targeted strategic advice to inform the Council’s priority setting process.

In December 2016, the COAG Energy Council tasked the Australian Energy Market Commission (AEMC) with providing targeted strategic advice to inform the Council’s priority setting process.

Since Council issued the terms of reference to the AEMC, the Independent review into the future security of the National Electricity Market (the Finkel review) examined sector governance in the context of power system security and reliability, reporting in June 2017. Council initiated the Finkel review on 7 October 2016 to take stock of security and reliability in the national electricity market following the September system black event in South Australia.

The Finkel review recommended that a new Energy Security Board be established, and its responsibilities include implementing the ‘Finkel blueprint’.  The Finkel review also recommended that COAG develop a strategic energy plan.

It is envisaged that the Finkel-recommended strategic energy plan will be the mechanism through which the Council will articulate the sector’s strategic direction, and identify priorities and related work plans. The Energy Security Board will prepare advice to Council on the strategic energy plan.

As such, this AEMC review will be an input to the Energy Security Board’s consideration of advice to Council.

On 12 September 2017 the AEMC published a discussion paper on strategic priorities for the Australian energy sector. Stakeholder submissions are due by 10 October 2017.

Public forum

The AEMC hosted a public forum on 12 September 2017 in Melbourne to facilitate stakeholder input into the development of our advice.

AEMC Chairman John Pierce was joined by Energy Security Board Independent Chair Dr Kerry Schott and Deputy Chair Clare Savage, AEMO CEO Audrey Zibelman, AER Chair Paula Conboy and Energy Consumers Australia CEO Rosemary Sinclair to hear stakeholder perspectives on guiding the evolution of the energy market into the long term.

Read Mr Pierce’s opening remarks.

Watch the recording of the webcast.

Next steps

The AEMC will consult extensively with stakeholders throughout the project and welcomes stakeholders to contact the project team at any time.

The energy sector strategic priorities review process will comprise of:

  • scoping, information gathering, and initial conversations with stakeholders (March to July 2017)
  • the development of a discussion paper (by September 2017)
  • formal stakeholder consultation on the discussion paper (September to October 2017)
  • delivery of the final advice to the COAG Energy Council (late October 2017)

Background

The COAG Energy Council's governance review recommended in 2015 that the AEMC prepare a major policy paper every three years containing advice on market development strategy to inform the Council’s priorities for the energy sector. Following that recommendation, the COAG Energy Council has formally requested advice from the AEMC on energy sector strategic priorities.

The Terms of Reference require that the advice identifies current and future challenges and opportunities facing Australia’s energy sector and energy markets. The final report will be a broad, high level analysis that sets out significant current and potential challenges, risks and opportunities relating to the energy policy, regulatory or operational environment.

The AEMC initiated the first strategic priorities review in 2011 and conducted further reviews in 2013 and 2015. The priorities were developed in close consultation with community, business and government stakeholders. Our reviews identified:

  • challenges posed by the changing generation mix for power system security and the financial resilience of energy markets
  • the importance of integrating energy and emissions policy
  • the need for predictable policy to underpin future investment in generation capacity
  • ways to enable energy consumers to make informed choices, focusing on protection, participation and engagement, so consumers can benefit from innovations and enhanced competition in energy markets
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Documentation