The AEMC today called for submissions on its proposed approach to a new biennial review to track the growth in liquidity in wholesale gas and pipeline trading markets.

Gas markets are currently being redesigned to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia. The changes are based on a package of reforms developed by the AEMC and endorsed by the COAG Energy Council.

As implementation of the complete reform package will take several years, this first review of gas market liquidity will focus on providing a baseline for future reviews.  In particular, the review will provide baseline measures of liquidity for the east coast and the Victorian Declared Wholesale Gas Market, where possible, and also develop the methodology for tracking liquidity over time.

The baseline measures will enable the AEMC to track progress and assess the effectiveness of reforms and the case for further reform to wholesale gas and pipeline trading markets over the longer term. Broadly, the biennial reviews will:

  • monitor changes in liquidity in the wholesale gas and pipeline capacity trading markets 
  • report on the effectiveness of reforms in the east coast and Victorian gas markets

  • identify the need for any further reforms, if appropriate.

The scoping paper released today outlines the AEMC’s proposed approach to the review, including the liquidity metrics that form the basis of the baseline measures, and the methodology for determining those metrics.

Submissions on the scoping paper are due by 6 March 2018. A draft report is due to be published in April 2018.