Market Review: Completed
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.
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.
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.
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.
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.
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.