Review of the Institutional Governance Arrangements of the National Electricity Market
148 Pages Posted: 21 Jun 2018
Date Written: June 20, 2018
This Report was commissioned by the Public Interest Advocacy Centre to advise a number of energy consumer advocacy groups about the institutional and governance arrangements of the Australian National Electricity Market as part of the Vertigan Review. The purpose of this Report was to review the existing arrangements, compare these arrangements to those in other international jurisdictions and then identify areas of strength and those requiring reform.
The Report begins by considering the recent transformation of the energy sector and highlights the need for a flexible approach that encourages demand-side management, the deployment of emerging energy sources and technologies, and greater energy efficiency. It also briefly considers whether the narrow drafting and interpretation of the Australian National Electricity Objective remains fit for purpose when compared to developments in other international jurisdictions such as China, the European Union and NordReg. The Report then examines the existing governance structure adopted within the Australian National Electricity Market. In particular, it examines each of key market institutions – the COAG Energy Council, the Australian Energy Regulator, the Australian Energy Markets Commission, the Australian Energy Markets Operator and Energy Consumers Australia Ltd. The legislative or corporate mandates of each institution are analysed, along with their governance processes, to assess areas of strength and possible areas of reform. The Report critically compares the roles and responsibilities of the Australian market institutions to international institutions that act as their functional equivalents. Other governance issues that are common within the energy sector, such as the challenges of federalism and how these can be better managed into the future are also analysed. The Report concludes with a consolidated list of potential areas for reform.
Keywords: electricity market, governance, energy sector, Australia, National Electricity Market, utilities, federalism, energy transition, energy regulation, regulator, consumers
JEL Classification: K10, K30, K23
Suggested Citation: Suggested Citation