Market Review: Completed

Overview

The AEMC has released a report on the current state of the east coast gas market. It provides an overview of changes in the east coast gas market, and identifies areas of potential improvement in the market and regulatory arrangements.
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<p>
The AEMC has released a report on the current state of the east coast gas market. It provides an overview of changes in the east coast gas market, and identifies areas of potential improvement in the market and regulatory arrangements.</p>
<p>
The AEMC initiated the gas market scoping study in May 2013, in response to changes underway in Australia&rsquo;s eastern gas markets due to the emerging liquefied natural gas export industry, and feedback from stakeholders through the strategic priorities review.</p>
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The purpose of the study was to:</p>
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<li>
provide an overview of the changes underway in the eastern gas market; and</li>
</ul>
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<li>
identify areas of potential improvement in the market and regulatory arrangements that may benefit from future market development work, prioritise their importance, and identify who may be best placed to take the work forward.</li>
</ul>
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K Lowe Consulting, with Farrier Swier Consulting, was engaged to assist the AEMC in undertaking the study and to prepare a report that addressed the above terms of reference.</p>
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The scoping study is focussed on the downstream sector &ndash; from when gas enters the pipeline system for delivery to end users. A key finding of the scoping study is the need for a strategic plan for market development within which the industry can work towards achieving a more mature and well-functioning market. The report recommends a review that examines the role of trading markets, such as the STTM, Victorian declared wholesale gas market (DWGM) and the Wallumbilla gas supply hub, in eastern Australia. The review would examine the mix and location of trading markets, the size of the market and types of participants, and the costs and benefits. Any finding from the review that there is a need to develop financial risk management products would also require consideration of the need to attract sufficient liquidity to support such development.</p>
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The AEMC will continue to work with SCER, the Australian Energy Market Operator (AEMO), the Australian Energy Regulator (AER), industry stakeholders and consumer groups on a pathway to support the development of Australia&rsquo;s gas markets.</p>
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The Commission would like to thank all stakeholders who participated in the consultation process</p>

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