Energy
A truly national energy market
A program of substantial reform over the last 10 years has produced considerable productivity gains through the disaggregation and deregulation of the sector, introduced market rules to enforce reliability of supply, stimulated the introduction of new entrants in anticipation of demand growth and produced competitive pricing.
Commonwealth, state and territory policies have stimulated investment in renewable energy and lower emissions gas-fired generation. These measures have produced relatively impressive results to date. However, the capacity of industry to continue this level of expansion is restricted by the lack of proximity of renewable fuel sources to the existing grid.
Infrastructure Australia agrees that the energy supply system of the 21st century needs to be designed to meet the needs of an Australia with:
- an increasing commitment to reducing emissions from electricity generation
- an increasing focus on security of national energy supply
- a goal of driving maximum productivity from the national generation fleet across a truly national energy market.
Key attributes of a national grid to service the needs of the 21st century will include:
- the free flow of energy across the grid
- the eventual interconnection of the National Electricity Market with the South West Inter-connected System in Western Australia
- the progressive commercialisation of renewable energy sources that are currently underdeveloped, in particular: wind, wave, solar and geothermal.
Progressive extension of the grid to key development areas, for example the North West Minerals province in Queensland, the Olympic Dam region in South Australia, the Pilbara in Western Australia and the Midwest Minerals province in Western Australia is also important.
The development of new mines, extending the life of existing mines and the capacity for higher levels of localised processing can be facilitated by access to the scale and price efficiencies that result from access to the grid instead of reliance on localised generation.
Infrastructure Australia believes that the creation of a truly national energy market can be largely addressed through current and proposed regulatory reforms, the Australian Energy Market Commission's review of market frameworks and the national energy transmission planning process established by the Australian Energy Market Operator. Accelerating and implementing these reforms and plans should enhance the operation of competitive national markets in both electricity and gas, and should stimulate the necessary investment in energy infrastructure.
Infrastructure Australia continues to investigate the scale and scope of impediments to ensuring an effective energy market. Infrastructure Australia is placing particular emphasis on the issues of interconnection between states in the National Electricity Market and the ability of new energy supply sources to be connected to areas of demand.
Infrastructure Australia will continue to monitor the effectiveness of proposed reforms aimed at encouraging investment in transmission and renewable energy generation.