About development of Australia's energy market
Prior to the 1990s, energy policy in Australia was solely the responsibility of individual jurisdictions.
However, in light of the prospective gains, and in recognition of the benefits from a nationally coordinated approach, each jurisdiction committed, in April 1995, to a far reaching program of competition reform.
In 2004 the Commonwealth, state and territory governments set the agenda for a transition to national energy regulation, with the Australian Energy Market Agreement (AEMA).
About the National Electricity Market
The National Electricity Market (NEM) is a wholesale market through which generators and retailers trade electricity in Australia.
The NEM was established in 1998. It comprises six participating jurisdictions which are linked by transmission networks—Queensland, New South Wales, Australian Capital Territory, Victoria, Tasmania and South Australia. Western Australia and the Northern Territory currently operate their own electricity markets.
The NEM is governed by a single set of national institutions, established by the Council of Australian Governments (COAG) in the AEMA.
Energy market reform program
A competitive and efficient electricity market is integral to the secure, safe and reliable supply of electricity to Australian consumers and to the competitiveness of the Australian economy.
The energy market reform program implemented by the SCER drives electricity market policy. The lead Commonwealth agency for the program is the Department of Resources, Energy and Tourism (RET).
The program looks to drive efficient energy markets through:
- increased information transparency and facilitation of competition
- better price signals to encourage efficient supply side investment
- better demand side market participation
- putting in place an appropriate regulatory access framework and effective governance arrangements
Key activities in the SCER work program include:
- delivery of effective national frameworks that balance provision of adequate investment to maintain reliability of electricity supply and efficient pricing outcomes for customers
- introduction of measures to increase demand-side responsiveness
- introduction of a national consumer protection framework for the retail sale of electricity and gas
- implementing a process and framework upon which retail prices caps are removed, where there is effective retail competition
For more information about the reforms refer to the Standing Council on Energy and Resources website.