Market Review: Completed

Overview

On 30 September 2009, the AEMC provided its Final Report to the Ministerial Council on Energy (MCE) on the Review of Energy Market Frameworks in light of Climate Change Policies as required by the Review’s Terms of Reference.
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On 30 September 2009, the AEMC provided its Final Report to the Ministerial Council on Energy (MCE) on the Review of Energy Market Frameworks in light of Climate Change Policies as required by the Review’s Terms of Reference.  

Final Report

The Final Report presents the AEMC's final recommendations and findings for the Review.

The Report concludes that the energy market frameworks, supported by a number of recommended changes, are capable of accommodating the impacts of the Carbon Pollution Reduction Scheme (CPRS) and the expanded national Renewable Energy Target (expanded RET).  The recommended changes seek to improve and strengthen the ability of the energy markets to respond to these climate change policies while continuing to meet the desired market outcomes of efficient and reliable energy services.

Background

In August 2008, the AEMC commenced the Review of Energy Market Frameworks in light of Climate Change Policies as directed by the MCE.

The Review assessed whether energy market frameworks are resilient to the changes in behaviour that will result from the implementation of the CPRS and the expanded RET.  Essentially the Review focused on assessing how these climate change policies may affect the existing energy market frameworks and considered what amendments may be needed to those frameworks.

Scoping Paper

On 10 October 2008, the AEMC published its Scoping Paper on the Review.  The purpose of this paper was to seek stakeholder comments on the scope and set of key issues that were considered relevant to the Review. Submissions to the Scoping Paper closed on 14 November 2008. 

1st Interim Report

The AEMC on 23 December 2008 published the 1st  Interim Report for the Review.

The 1st Interim Report was a key milestone in the process of developing advice to the MCE. It presented the AEMC's analysis of the "stress points" in the frameworks, which were intended to be focused on in developing and assessing options for change.

The AEMC also published a range of material which was used to support and inform the preparation of the 1st Interim Report. This included a survey of the available evidence on the impacts that the CPRS and the expanded RET might have on energy markets.

2nd Interim Report

On 30 June 2009 the AEMC published the 2nd Interim Report for the Review.

The 2nd Interim Report presented the AEMC's draft findings and recommendations for the Review. It was a significant consultation milestone in the Review that formed the basis of the final advice to the MCE.

Broadly, the AEMC found that amendments were needed to a small number of important areas of the energy market frameworks to ensure that the existing markets will continue to achieve the desired market outcomes. In addition, there were a number of other areas which require only incremental change. These areas were considered to be best addressed in a timely way under the existing market mechanisms or processes.

The AEMC also published a range of supporting consultant reports which were used to inform the preparation of the 2nd Interim Report.

Stakeholder Consultation during the Review

Review Stakeholder Advisory Committee

In accordance with the direction from the MCE, the AEMC established a Stakeholder Advisory Committee with its membership comprising energy market operators and planners, regulators, industry and energy end user groups.

The purpose of the Advisory Committee was to provide advice and views to the AEMC regarding the review and on the consultation documents to be produced.

Public Forums

The AEMC on 1 May 2009, held a Public Forum in Melbourne for NEM related issues for the Review. The Forum was an opportunity to discuss the findings of the 1st Interim Report and for the AEMC to update stakeholders on progress towards the 2nd Interim Report, including the developing thinking on potential options for change.

A second AEMC Public Forum was held on 8 May 2009 in Perth to address issues specific to Western Australian energy markets.

AEMC Advice

Request for advice - AEMC Reliability Panel

The AEMC requested information from the Reliability Panel to inform its 1st Interim Report.  This advice was provided to the AEMC by the Reliability Panel on 18 December 2008.

AEMC Letter to the Australian Government Department of Climate Change

In December 2008, the AEMC provided advice in response to a request from the Australian Government Department of Climate Change that was cited in the Australian Government's Carbon Pollution Reduction Scheme White Paper.

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Documentation

PUBLIC FORUM

Industry forum on locational signals

Other advice

Public forum

Review Stakeholder Advisory Committee

Retail Regulator/Policy Roundtable meeting

Submissions on Discussion Paper

FIRST INTERIM REPORT

AEMC documents

Late submissions

AGL Received 25 February 2009 AGL Energy TRUenergy International Power and LYMMCO
AGL Energy TRUenergy International Power and LYMMCO A1 AGL Energy TRUenergy International Power and LYMMCO A2
AGL Energy TRUenergy International Power and LYMMCO A4 AGL Energy TRUenergy International Power and LYMMCO A5
AGL Energy TRUenergy International Power LYMMCO issue 8 Aurora Energy Received 23 February 2009
Australian Energy Market Operator - received 23 February 2009 Document
Australian Energy Regulator - received 23 February 2009 Document (1)
Australian Petroleum Production and Exploration Association - received 10 March 2009 Australian Petroleum Production and Exploration Association -  Attachment
Babcock and Brown Power - Received 24 February 2009 Clean Energy Council Received 26 February 2009
Energy Networks Association - received 26 February 2009 (attachment pending) Energy Supply Association of Australia - received 5 March 2009
Electricity Supply Industry Planning Council - received 23 February 2009 Energy Users Association of Australia - received 2 March 2009
Energy and Water Ombudsman NSW - received 23 February 2009 Financial and Consumer Rights Council - received 23 February 2009
Foundation for Effective Markets and Governance and National Consumer Policy Research Centre&nb Hydro Tasmania - Received 25 February 2009
Integral Energy - Received 24 February 2009 Major Energy Users - Received 26 February 2009
National Generators Forum - Received 24 February 2009 Origin Energy - Received 26 February 2009
Roaring 40s - Received 25 February 2009 Santos Received 12 March 2009
Secure Energy Received 26 March 2009 South Australia Minister for Energy - Received 15 March 2009
Synergy - Received 6 March 2009  Total Environment Centre - Received 24 February 2009
VENCorp - Received 23 February 2009 Western Power - Received 26 February 2009

Proposal documents

Consultant reports

Submissions on First Interim Report

SECOND INTERIM REPORT (1)

AEMC documents

Consultant reports

Late submissions

Submissions