Market Reviews: Open

2017 Energy sector strategic priorities

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

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 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.

Next steps

The AEMC will consult extensively with stakeholders throughout the project and welcomes stakeholders to contact the project team at any time. An approach paper will be published in April 2017, which will set out:

·         the context and scope of the advice

·         the proposed approach to the work and how we develop the advice

·         details about consultation processes for this work

The final report will be delivered to the COAG Energy Council in October 2017.

Background

The COAG Energy Council’s request for advice from the AEMC arose out of a recommendation in the Review of Governance Arrangements for Australian Energy Markets, completed in December 2015. The COAG Energy Council agreed to request strategic advice from the AEMC to inform the Council’s energy market strategy and priority setting.

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
  • the need for gas market reform so Australia has well-functioning gas markets as the LNG export industry ramps up.

The COAG Energy Council has now built on that earlier work by asking the Commission and its stakeholders to directly inform the energy ministers' own priorities and work program. In line with the Terms of Reference, the AEMC will deliver its detailed advice to the COAG Energy Council in October every three years with annual updates in between. This new process will replace the AEMC’s previous biennial strategic priority reviews.

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