Approach paper: AEMC advice to COAG Energy Council on strategic priorities for the energy sector

19 April 2017

In an approach paper published today, the AEMC has outlined how we propose to develop advice on strategic priorities for the Council of Australian Governments (COAG) Energy Council, due to be published later this year.

Effective and active leadership by the COAG Energy Council in setting a strategic direction for the energy sector is critical to deliver secure, reliable and safe power at the best price for consumers. The Council has tasked the AEMC with providing advice to inform the Council’s future priorities as the technology-driven transformation of the energy sector continues to accelerate.

Stakeholder views will underpin the AEMC’s advice to the Council. We will undertake a detailed program of consultation with a broad range of stakeholders including energy users and representative bodies such as Energy Consumers Australia and industry groups; existing and new energy market participants; government and regulators; interested groups; and the energy market bodies, the Australian Energy Regulator and the Australian Energy Market Operator.

We will also draw on submissions and other feedback provided by stakeholders through relevant inquiries and reviews, including the AEMC’s System security review, Distribution market model project and Retail competition review, as well as the Independent Review into the Future Security of the National Electricity Market chaired by Chief Scientist Alan Finkel.

The AEMC initiated the first strategic priorities review in 2011. The priorities, published every two years, 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. This new process will replace the AEMC’s previous biennial strategic priority reviews.

The advice will be broader in scope than the AEMC’s previous reviews, and will include a high level analysis of major challenges, risks and opportunities currently facing the energy sector as well as emerging structural changes that could transform the sector.

The scope covers issues arising in all parts of the energy sector across the states and territories. It includes matters relating to electricity, natural gas and energy retailing.

While we are not seeking formal stakeholder submissions on the approach paper, we welcome comments on our proposed scope and approach. Comments can be provided by contacting Emily Brodie by 12 May 2017:

AEMC Senior Adviser Emily Brodie (02) 8296 7800 or emily.brodie@aemc.gov.au

In line with the Terms of Reference, the AEMC will deliver its advice to the COAG Energy Council in October every three years, starting this year. The Council will then publish its strategic priorities in December.

Media: Communications Director, Prudence Anderson, 0404 821 935 or (02) 8296 7817