Today is 15 years since the launch of Australia’s National Electricity Market. To mark this anniversary, the AEMC and KPMG have published a collection of interviews with leaders of the reform process to document their experience and lessons for the future.
The publication was launched today by the Federal Minister for Energy, the Hon Ian Macfarlane, at a meeting of COAG’s Standing Council on Energy and Resources.
It includes interviews with thirty-one people from government and industry who played important roles in the reform process over more than a decade.
The purpose of this paper is not just to celebrate the anniversary of the NEM but to draw on lessons of how the process was managed in order to deliver a structural reform that has endured for a relatively long period of time.
AEMC Chairman, John Pierce, said the energy reform agenda of the 1990s had a particular focus on capital intensive utility services like energy, communications, transport and water which were understood to be fundamental to long-term growth of the national economy.
“A common feature of these sectors was that they were dominated by publicly owned enterprises often with a monopoly industry structure. Prices did not reﬂect efficient costs and investments and decisions were centrally directed,” Mr Pierce said.
“Risks associated with the efficiency of the sector were therefore borne by consumers. They also intersected the interests and responsibilities of multiple levels of government.
“The NEM has proved to be a sustainable reform – capable of being built upon and a fundamentally important input to the performance of the Australian economy.
“We hope the findings of this case study will provide lessons and insights for dealing with the issues we face today in the energy sector and other sectors of the economy,” he said.
KPMG Asia Pacific Energy Leader, Michael Bray, said he hoped the case study will provide a useful guide on how to develop and implement microeconomic reform policies to help improve productivity and growing prosperity for the benefit of all Australians.
“It could also underpin effective energy policy and markets in the future, helping to establish the basis for financing the investments required to drive efficient energy markets,” Mr Bray said.