Policy success in reforming our electricity markets, which requires a commitment to continued reform by all jurisdictions, would result in:
- more efficient and competitive retail and wholesale markets with transparent and market-based price signals that promote efficient patterns of investment and energy use
- this should also include improved service delivery and a greater range of energy management products and services
- more efficient and transparent delivery of network services with investment aligned with evolving market and consumers needs, with reduced barriers to connection and demand-side participation
- this should also include transparent and effective network regulation and customer-appropriate reliability and other performance standards that strike an efficient balance between cost and service delivery
- electricity networks and markets that effectively encourage and accommodate an efficient balance supply- and demand-side opportunities and a more diverse national generation profile, with an accelerating deployment of clean energy, including distributed generation
- a more commercially disciplined market (including networks) with less government participation, greater transparency, and better governance of businesses that remain publicly owned
- an investment pipeline capable of meeting expected future needs in all market segments
- a more national approach to the regulation of energy markets, including the implementation of the National Energy Customer Framework and the full transfer of non-economic retail regulatory functions to national market bodies, along with a robust and effective framework to protect vulnerable customers
- high-performing independent national energy market institutions with adequate capacities, capabilities and accountabilities to perform their assigned functions.
Electricity market policy actions
The Australian Government will work with the states and territories to improve the efficiency of Australia’s electricity markets through a comprehensive program of market and regulatory reform focusing on:
strengthening institutional arrangements and market governance by
- enhancing the capability, performance and accountability of the AER and AEMC, including exploring options for an industry-contribution funding model(for the AEMC)
- encouraging state and territory governments to create a more level playing field in energy markets and to promote greater commercial efficiency and discipline in energy businesses, including through enhanced corporate governance (jurisdictions will also be encouraged to provide greater transparency around dividend and other payments)
- improving consumer representation and participation in market processes, including support for the development of a national energy customer advocacy body and better access and capabilities to constructively participate in regulatory decisions
- exploring options consistent with the provisions of the AEMA to extend national governance arrangements to cover all Australian electricity and gas markets
improving network efficiency and performance by
- supporting the independent AEMC rule change process for the economic regulation of networks so that new rules (and any transitional arrangements) can take effect before future regulatory determinations
- enhancing the limited merits reviews regime applying to network determinations by responding to the recommendations by the independent panel, including making any necessary amendments to the National Electricity Law
- investigating the need to review scheduled network expenditures in the light of revised demand forecasts
- responding to recommendations of the Productivity Commission inquiry investigating the application of performance benchmarking to network businesses
- supporting the development of a national and independent approach to the setting of distribution network reliability standards
- improving network planning and connection outcomes through a timely response to the AEMC Transmission Frameworks Review and further work to develop a national framework for distribution connection
- examining areas to open network services, including connection services, to competition
empowering consumers by
- improving demand side outcomes by responding to the AEMCs Power of Choice review
- developing a national framework to guide smart meter deployment
- seeking a clear commitment, from jurisdictions yet to do so, to introduce or investigate more cost-reflective pricing, ensuring the interests of vulnerable consumers are protected
- implementing an industry-wide system for access to distributor- and retailer-held customer information
- seeking a commitment to implement the National Energy Consumer Framework by all NEM jurisdictions
ensuring competitive and efficient wholesale and retail markets by
- seeking a clear commitment and timeframe for deregulating retail price controls where effective competition exists
- developing national guidelines that provide a benchmark approach to a fair and reasonable feed-in tariff for microgeneration to encourage competition and clear rights and obligations for the terms of connection
- ensuring that key non-market interventions continue to interface efficiently with the electricity market
- rationalising policies and programs that are not complementary to a carbon price, or are ineffective, inefficient or impose duplicative reporting requirements on business
- undertaking further work to improve the efficiency of capital deployment and prudential and regulatory frameworks for the wholesale, over-the-counter and exchange markets
- continuing to closely monitor market conditions, including the robustness of planned and committed investment and the functioning of supporting financial markets.