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Key departmental publications, e.g. annual reports, budget papers and program guidelines are available in our online archive.

Much of the material listed on these archived web pages has been superseded, or served a particular purpose at a particular time. It may contain references to activities or policies that have no current application. Many archived documents may link to web pages that have moved or no longer exist, or may refer to other documents that are no longer available.

Energy Market Reform factsheet cover

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Energy Market Reform

Australian Ministerial Council on Energy

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The Goal

To ensure the future prosperity, security and sustainability of energy production and use in Australia through energy market reforms.

The Challenge

Demand for energy services in Australia is expected to grow by at least 50% over the next 14 years, requiring an estimated AU$37 billion in investments. The energy sector needs to be managed efficiently and effectively in order to ensure its future security and sustainability.

This case study

This case study is an overview of policy initiatives related to the reform of the electricity and gas markets in Australia.

In 2004 the Australian Government issued a policy statement entitled Securing Australia’s Energy Future which outlined the Australian Government’s approach to achieving energy prosperity, security and sustainability. Australia’s energy policies seek to:

How did we make it happen?

In 2001 the Council of Australian Governments established the Ministerial Council on Energy (MCE) to develop and implement national reforms in the energy sector. In 2004 the new energy market reforms developed by the MCE were formalised in the Australian Energy Market Agreement through a three year reform program.

This reform program was extended in 2006 by the Council of Australian Governments (COAG) to include a more comprehensive demand-management program through the national roll-out of ‘smart’ electricity meters from 2007 and the establishment of a high level Energy Reform Implementation Group to consider issues relating to establishing a national electricity transmission grid, effective energy market structures and the operation of financial markets.

How far have we come?

The MCE has made significant progress in implementing its energy market reform program. New initiatives introduced include: Governance and Institutions – to underpin the new governance arrangements two new statutory bodies were established: the Australian Energy Market Commission has responsibility for rule-making and market development; and the Australian Energy Regulator has responsibility for market regulation, surveillance, rule enforcement and price regulation.

Economic Regulation – a national approach to energy access was established under the Trade Practices Act 1974 and an appropriate design for energy access is being developed. A National Framework for Electricity and Gas Distribution and Retail Regulation is also being developed, which considers the issues of pricing, licensing, industry Codes and Rules and service standards.

Electricity Transmission – A transmission policy/framework was released in 2005, providing a national approach to efficient transmission planning, investment and operation through the concept of a national grid.

Energy User Participation – A policy statement on a User Participation Framework was released in 2004 that encourages greater user participation through demand side response, interval metering, consumer awareness and consumer advocacy.

Gas Market Development – In April 2004, MCE announced the Expanded Gas Program to accelerate the development of a reliable, competitive and secure natural gas market. The Gas Market Leaders Group was established in 2005 to develop a gas market development plan.

What have we learnt?

The process of Energy Market Reform in Australia has had a strong policy base and national approach, coupled with technology, industry development and consumer participation programs. Reforms have also benefited from sharing experiences at an international level, in particular with the International Energy Agency and the APEC Energy Working Group.

For more information on the energy market reform process, please refer to the following websites:
http://www.mce.gov.au/ (Ministerial Council on Energy Homepage)
http://www.dpmc.gov.au/publications/energy_future/#about (Energy Policy)