Australia energy Market 2012

8/22/2019 Australia energy Market 2012

1/141

State of the energy market 2012


2/141

state o theenergy market2012


3/141

auli e rul

Lvl 35, t tw, 360 elizb s, mlbu Cl, mlbu, Vici 3000

eil: [email protected]

Wbi: www..v.u

IsBn 978 1 921964 85 5

i publid b auli Cpii d Cu Cii 2012

Cwl auli 2012

ti w i cpi. ap u pid ud Copyright Act 1968, p b pducd wiu

pi wi pii auli Cpii d Cu Cii. rqu d iquii cci

pduci d i uld b ddd Dic Publii, aCCC, gPo Bx 3131, Cb aCt 2601,

[email protected].

aCknoWLeDgements

ti p w ppd b auli e rul. t aer ull cwld llwi cpi d

v ci v cibud i p: auli Buu siic; auli e m op;

auli e m Cii; Buu ruc d e ecic; d-cptd; eQu; eil

svic Cii (Vici); eil svic Cii su auli; Idpd Cpii d rul

Cii (aCt); Idpd Pici d rul tibul nw su Wl; oc ti ecic

rul; d Quld Cpii aui.

t aer l cwld hd ti, J d oii e uppli ppic i.

IMPORTANT NOTICE

t ii i i publici i l uidc l. I d ciu ll pil dvic, d

uld b lid lw i juidici. Bcu i i idd l l uid, i

ci lii. yu uld bi pil dvic i u v pcic cc.

t aCCC d v bl pvid cu d ccu ii, bu i d u

di ccuc, cuc cpl ii.

edi: edi m, mlbu

Cv i: g I (Viii s) d iscp


4/141

iii

Contents

1 PREACE

2 MARKET OVERVIEw

5 a.1 ril pic

8 a.2 e w c

12 a.3 ri w uli

16 a.4 Wll lcici

20 a.5 Cli c plici

21 a.6 g

24 a.7 ri il

26 1 NATIONAL ELECTRICITY MARKET

28 1.1 Dd d cpci

30 1.2 gi i nem

40 1.3 hw p

41 1.4 Iil d

42 1.5 sp lcici pic

49 1.6 elcici uu

51 1.7 gi iv

55 1.8 Dd id picipi

55 1.9 rlibili uppl

57 1.10 Cplic ii d c


5/141

STATE OF THE ENERGY MARKET 2012iv

58 2 ELECTRICTY NETwORKs

60 2.1 elcici w i nem

64 2.2 ecic uli lcici w67 2.3 elcici w vu

68 2.4 elcici w iv

70 2.5 opi d ic xpdiu

72 2.6 Dd d i

73 2.7 tii w pc

76 2.8 Diibui w pc

79 2.9 Plic dvlp lcici w82 3 uPsTREAM gAs MARKETs

84 3.1 g v d pduci

87 3.2 g dd

88 3.3 Idu ucu

92 3.4 g wll

94 3.5 e auli pic d ul

97 3.6 Cplic ii d c99 3.7 Up cpii

100 3.8 g

102 4 gAs PIPELINEs

104 4.1 owip

109 4.2 ruli pipli

111 4.3 aer rul c ppl pipli uli

111 4.4 rc aer dcii pipli

112 4.5 tibul viw aer dcii

112 4.6 Pipli iv

113 4.7 Pipli vu d il ipc

116 5 ENERgY RETAIL MARKETs

118 5.1 ril ucu

119 5.2 Vicl ii

124 5.3 ril cpii

125 5.4 ril pic

134 5.5 Quli il vic

136 ABBREVIATIONs


6/141

1

PreaCe

t auli e rul ix State o the energy

marketp c i cui d bui

cc bu ii pic. t iic

cu b ici c ui lcici d

w, wic up ud 45 p c il

bill.

gv, plic d ul v

pd ip uu w

pic dii u cu p

c ci d libl uppl.

s w lid l i , wil

d ip dvc. t iclud j

vul rul di w w c

(lid i nvb 2012); j vul

i viw ddd $3.3 billi

w c ic 2008 (xpcd b lid

i 2013); v wd il ppc i

libili dd u cui p l libili i qui (iic w pd i 2012);

d pw cu i

u d v c b ii cupi w

p i (j w cpld i nvb

2012, wi u w i 2013).

ti dii State o the energy marketi xpli,

i ccibl lu, c v div up

pic, d ip plic d ul

p bi ipld. I l cv ip

dvlp i . ti d aCt

lucd il il i Jul 2012, d vl

juidici ucd pl llw ui dui 2013.

t aer lucd pic cpi vic

(www.d.v.u) p .

Cb pici w iducd 1 Jul 2012 d,

pid vlili, pic ld xpcd.

t w wi vidc lcici dd

i f vl , pui u iv

iz i d w. t i di

i , wi iil dd pui upwd

pu pic d ii pibili icd

uppl i auli 2016.

I p i 2012 dii State o the energy market

will pvid vlubl uc picip,

plic d wid cui. a uul,

p cu v p 1218

i juidici d i wic aer

ul pibilii.

Andre Reeve

Ci

Dcb 2012
http://www.energymadeeasy.gov.au/http://www.energymadeeasy.gov.au/


7/141

sp

Cp(nwpix)

marketoVerVIeW


8/141


9/141

STATE OF THE ENERGY MARKET 20124

rii pic ciud j cu

cui, bui, plic d ul i 2012.

ridil lcici pic v p v

ill b 91 p c. g pic b 62 p c.gv, plic bdi d ul dvlpi

d ipli id liii uu pic

v c dliv cicll

ci d libl uppl.

t i div i il pic b ii

c ui w i, pl d

wi, d pipli p cu.

a ub c v div i w c.

s cc w i p dd, d plc i quip, d i ci

c du cdii i lbl cil w

ll uvidbl. Bu c pu w dicul

jui.

I picul, rul, dd i 2006, liid

x wic auli e rul (aer)

culd d vu ppl pu wd b w

bui. Wil rul fcd plic cc

i bu dquc w iv, ld ucil i vu w

bui. a uc c pu b

ic libili dd d i

v ipd v p dcd. mi

dd quid iicl i iv b

w bui.

muc ul d plic civi i p

1218 id ii w c pu.

I picul, aer i 2011 ppd rul c u cu p c

cicll ci d libl uppl .

llwi dild public culi, auli e

m Cii (aemC) i nvb 2012 ucd

iic dd cc id

b aer.

t aemC i 2012 l viwd w w libili

dd bi i lvl cui

qui, d w ppc i dd c civ. addiill, i Power o choice viw

xpld liv w iv i p

ii p dd. Cpld i nvb 2012,

viw cdd pwi cu

i u d v c b ii

cupi w p i.

t i iclud: lli u ivl

cbl bi, p pc iclud

i vi pic; bli cu ll

ll cl i pi i lcici

il; d i ppuii cu

dicl i wll . t Cucil

auli gv (Cag) i Dcb 2012ppvd dpi i picipl ull Power

o choice cdi. I ppd pi i

i vi w c, d w dd id

ci wll , b Jul 2014.

al ci w c v b auli

Cpii tibul viw aer dcii. nw

bui u viw 22 aer dcii bw

2008 d 2012; tibul dcii

d bui ddiil $3.3 billi ivu, wic fwd u w c d

cu bill.

Cc bu i viw w ld

sdi Cucil e d ruc (sCer) i 2012

ppi xp pl viw . t

pl cdd i uld b liid il

ud ppl ill pbl dcii

xid uld viw i li

il bjciv u i lili. I lcdd llwi viw bd xpl

pc aer dcii i cid lv; d

llwi ipu cu. Cag i Dcb

2012 cdd b cd plic

p viw b id2013, d dd

i b i plc b d 2013 i dvc x

ud aer dii.

alid iic plic p cli

w c b c i pivi w bui. aer dcii d

i p 1218 fc f dd d

lw ipu c d pu w

c. t dcii l fc lwi bui

ci c.

Wil w c dv i il pic v

p v , w l pu wll

c. elcici p pic ll dil 2010

uil iduci cb pici 1 Jul 2012.av p pic i Quld d su auli

w cd lw i 201112, d pic lw i

nil elcici m (nem) w cd lw.

a i cc b ic i didl

biddi i wll ( i, i

bid wiu c i udli i c).

Wil i bviu d liid dic ipc

cu i 201112, i culd dvl c cpii

d cic i l .


10/141

5

MARKETOVERVIEW

sp pic pl dui wi 2012. ti d

cicidd wi ii i Quld dic cc , wic w cid wi liqud ul

(Lng) dvlp pjc. t

i ll xpcd i i v x dcd,

wi pibl cll dic uppl 2016.

auli v cidi plic p,

icludi w di Wllubill, wic i

j uppl ub i Quld.

llwi iiil vlili, iduci

cb pici 1 Jul 2012 cud upli i plcici pic ud 21 p c, wic w i li

wi xpci. t w lil ipc pic.

Cb pici ld - ic i lcici il bill

513 p c i 201213. C cid wi

cli c plici (icludi wbl

(ret) c, dd d-i i p

l pvlic (PV) illi, d cic

c) w livl bl 201213.

gv v pdd cui ccbu ipc cli c plici il pic.

m juidici v vd ducd dd

d-i i. t auli gv viwd

pi ret c i 2012 d cd

cb pici bli cl li wi

iil cb . I l iducd cil

ic pc ili, ii c

cb pici uld bud.

I ddii plic p duc c pu

il pic, d i v

pivl ipli

il c il. t nil e ril Lw ppli , wic p cpii d pw

cu lc cc ui i d.

ti d aCt ipld dui

2012. su auli d nw su Wl

ipli d 1 bu 2013 d 1 Jul

2013 pcivl.

o 1 Jul 2012 aer lucd e md e

pic cp (www.d.v.u) lp

ll cu cp vilbl .t wbi l pvid ii ,

u, d cu i d blii.

A.1 Retail enery pricet bill pid b il cu cv c

wll , p u ii d

diibui w, il vic d c cid

wi cli c plici. iu 1 i cpii picl lcici il bill idil

cu i auli.

Network charges pi lcici u

ii d diibui w up

45 p c cu bill; i ipc i

bill i nw su Wl d Quld. Diibui

c ccu bul c.

Wholesale electricity costs up id cu

bill ( cb c); i ipc i billi ti d su auli. t c icud

b il i bui lcici i p d

i pic i u diviv .

C cid wi carbon pricing up 8 p c

cu bill.

ogreen costs cid wi c dvlp

wbl lw ii i, p

cic, up 5 p c cu bill. t

iic c l ret c, c dd l d-i i, d juidicil

cic c.

Retailer operating costs and margins cibu ud

10 p c il bill.

I , pipli c ccu up w id

il bill. Wll c picll ccu

lw il bill i lcici, wil

il pi c (icludi i) ccu

i .

ire 1

Indicative compoition o reidential electricity bill,

201213

Wholesale energycosts 32%

Network costs 45%

Carbon costs 8%Green costs 5%

Retail costs 10%

n: Bd di pic i Quld, nw su Wl,su auli, ti d aCt. Cpbl d vilbl Vici.

suc: aer.


11/141


ire 2

Electricity and a retail price index (real)Atralian capital citie

Index

1991=1

00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Household electricity Household gas Business electricity Business gas

0

20

40

60

80

100

120

140

160

180

n: Cu pic idx lcici d i, dfd b cu pic idx ll up.

suc: aBs, Consumer price index, c. . 6401.0, viu .

ire 3

Movement in related and tandin oer electricity price, by jridiction

0

5

10

15

20

25

200809

200910

201011

201112

201213

200809

200910

201011

201112

201213

200809

200910

201011

201112

201213

200809

200910

201011

201112

201213

200809

200910

201011

201112

201213

200809

200910

201011

201112

201213

%i

ncrease

Queensland New South Wales Victoria South Australia Tasmania ACT

Range of price increases

n:

eid ul c i bd cu ui 6500 ilw u lcici p p l (il ) i auu 2012.

t Vici pic v (d id ul c) bd uuld di pic publid i Vici gv z b lcl il i c Vici v diibui w.

suc: Dii, c d di l b IPart (nw su Wl), QCa (Quld), esCosa (su au li), otter (ti)d ICrC (aCt); Vici gv z.


12/141

7

MARKETOVE

RVIEW

Residential electricity customers in jurisdictions other than

Tasmania1 can enter a market contract with a retailer o

choice, or a standard retail contract with deault terms

and conditions. All jurisdictions except Victoria regulateretail prices or small electricity customers supplied under

a standing oer contract. The AER does not regulate retail

prices in any jurisdiction.

Figure 2 illustrates long term trends in energy retail prices or

residential and business customers in capital cities. Figure 3

(and table 5.4 in chapter 5) illustrates recent movements

in regulated and standing oer electricity prices. The price

spread or New South Wales and Victoria reects a range o

outcomes across distribution networks in those jurisdictions.

From 2000 to 2007, electricity prices rose annually by

around 3.6 per cent (0.8 per cent in real terms). Following

this period o relative stability, energy prices began to rise

signifcantly rom 2008. Residential electricity prices rose

nationally by 91 per cent (66 per cent in real terms) in the

fve years to 201213. Gas prices rose by 62 per cent

(40 per cent in real terms) over this period.2

Rising network costs (especially or distribution networks)

were the main driver o these outcomes (as explained in

section A.2). In the current regulatory period, the annual

increase in network charges has been over 20 percent in

New South Wales and South Australia; 910 per cent in

Queensland; and up to 15 per cent in Victoria. The estimates

include costs associated with solar eed-in taris.

The Independent Pricing and Regulatory Tribunal (IPART)

submitted in September 2012 to the Senate Select

Committee that network costs in New South Wales rose by

130 per cent over the past fve years, adding $654 to annual

charges or a typical residential customer (fgure 4). Network

costs were responsible or almost 60 per cent o retail price

rises in New South Wales in this period.

Costs associated with green schemesincluding the RET,

carbon pricing, solar eed-in taris and energy efciency

schemesalso owed through to retail prices. The

introduction o carbon pricing on 1 July 2012 led to one-o

retail price rises in 201213 o 513 per cent. The variation

reects a number o actors, including dierences in howstate and territory agencies pass through carbon pricing to

energy customers.

1 The Tasmanian Government expects to extend retail contestabil ity to all

Tasmanian electricity customers rom 1 January 2014.

2 ABS, Consumer price index, cat. no. 6401.0, various years.

The carbon impact was lowest in South Australia, reecting

the relatively low emissions intensity o the states gaspowered and wind generation. The proportional impact was

higher in the ACT, where retail prices came o a relatively

low base ater limited movement or a number o years.

IPART estimated the combined costs associated with green

schemes (the RET, carbon pricing, the NSW Climate Change

Fund and the NSW Energy Savings Scheme) added $316

to New South Wales customer bills over the past fve years

(30 per cent o the total price rise over this period).3

Coinciding with the introduction o carbon pricing, theAustralian Government introduced a Household Assistance

Package in 2012 to oset the rise in energy costs or low

and middle income households. The package provides or

households to receive compensation through pensions,

allowances and other assistance payments, and to beneft

rom tax adjustments.

While regulated and standing oer prices have risen

signifcantly, customers in most jurisdictions can negotiate

discounts against standing oer charges by entering amarket contract. In August 2012:

the average discount in Queensland, New South

Wales and South Australia under market contracts was

5.5 per cent (with discounts as high as 15 per cent)

3 IPART, Promoting the long term interests of electricity customers:submission to the Senate Select Committee on Electricity Prices,

September 2012.

Figure 4

Change in average New South Wales residential

customer bills, 20078 to 201213

Annualcost($)

0

500

1000

1500

2000

2500

Wholesale energy costs Network costs Carbon costs

Green costs Retail costs

Total bill200708

Total bill201213

Source: IPART, Promoting the long term interests of electricity customers:submission to the Senate Select Committee on Electricity Prices,September 2012.


13/141


ppuii dicui w i i Vici,

w v cc dicu w

8 p c (wi dicu i 25 p c)

dicu i cc vd 6 p c i

Vici, bu l 2 p c lw.

t vi cc i d dicu ul i

iic pic pd. ac ll juidici i 2012,

pd i ul il c wii picul diibui

w w up $500 i lcici (bu $8501150 i

Vici) d up $200 i . t uc u

cidbl cp id cu i

i ccpicull i Vici, w il

pic uld.

Bu vi il p cll ll

cu. I i d wld iul

cpi. t lp ll cu cp il

i, aer lucd li pic cpi

vicwww.d.v.u cu i

ll juidici ipl ril Lw. ti

d aCt d iducd ril Lw 1 Dcb

2012. s juidicil ul d piv ii

l p wbi llwi cu cp i cc wi vilbl .

svl juidicil v pdd cui

cc bu pic i 2012 b viwi i

ppc uli di pic:

t Quld gv ipd pic z

uld lcici p i idil

cu (p ic uli

iduci cb pici). t dcii liid

lcici pic ic v cu i

i 10.6 p c 201213.

t eil svic Cii su auli

(esCosa) ppd w ppcui

c, l u il c

i i wll c

fwi u uld il pic. P liquidi i

di d pviul pcludd i ppc.

I pplid i 2013, ppd ppc wuld duc

wll c llwc b 22 p c d uld il pic b 8.1 p c.

I ti, c i bi ii

wll c ducd il pic b

6.1 p c i 2012, pl i i i c.

Quld d nw su Wl vid i

ppc ii wll c. ril

pic dii pid bii 1 Jul 2013

will fc c.

t Vici gv will llw lcici cu

cic bw xd d i vi il pic

Jul 2013 (ci a.3.5).

A.2 Enery netork chareUi cpi pl d wi p lcici

cu wuld b ici; id, uld ul

pl bui p lcici. g diibui

w d ii pipli uld

iil .4 t aer di llwbl w

vu d c ui lcici w i

auli, d ui pipli uidW auli.

t vci ul w u i

nil elcici Lw d nil g Lw. t

lili i p ci iv i, d

pi , vic l i

cu. t nil elcici rul d nil g

rul u qui iv c lili,

icludi pc aer u llw i dii

llwbl vu cv lcici w d pipli.

t aer c w bui

ubi vu i d cv ci c d

pppi u cpil. t i vu

cp :

u cpil, wic ccu

4070 p c vu du cpil iiv

u w bui. t c di

u cpil iz w b,w iv ddd b, d u

( wid v c cpil, WaCC). rlivl

i c WaCC c ill ipc

w c.

pi d ic c, wic ccu

ud 30 p c vu.

iu 5 illu vu cp Quld

ii (201217) d Vici diibui (201115).

tl vu w i nem c

$60 billi v cu v ul pid,

cpii v $12 billi ii d $47 billi

diibui. iu 6 illu d i w

vu c aer dcii.

4 t cuci w ii pipli icdcpii i c d vd d ul

pipli.


14/141

9

MARKETOVE

RVIEW

ire 5

Indicative compoition o electricity netork revene

Return on capital

Depreciation

Operating expenditure

Other

69%

8%

22%

1%

Queensland transmission

49%

15%

33%

2%

Victorian distribution

n:

Vici diibui i v v w.

Dii d i 2010 (Vici) d 2012 (Quld).

suc: aer.

ire 6

Electricity netork revene

Transmission networks Distribution networks

1 000

2 000

3 0004 000

5 000

6 000

7 000

8 000

9 000

10 000

SPAusNet(Vic)

ElectraNet(SA)

TransGrid(NSW)

Transend(Tas)

Powerlink(Qld)

AusGrid(NSW)

EndeavourEnergy(NSW)

EssentialEnergy(NS

W)

ActewAGL(ACT)

Energex(Qld)

ErgonEnergy(Qld)

SAPowerNetworks

(SA)

Powercor(Vic)

SPAusNet(Vic)

UnitedEnergy(Vic)

CitiPower(Vic)

Jemena(Vic)

AuroraEnergy(Tas)

Previous regulatory period Current regulatory period

73%

2011$million

69%

19%

42%

17%

24%50%

76%

34%

41%40%

33%

18% 45%

9%13% 29% 13%

n:

c i ul dii, dd dcii b auli Cpii tibul.

t Quld gv pvd ex d e e cvi $270 illi d $220 illi pcivl llwc.

suc: aer.


15/141


ire 7

Electricity netork invetment and operatin expenditre

Transmission networks Distribution networks

Percentage

SPAusNet(Vic)

TransGrid(NSW)

ElectraNet(SA)

Transend(Tas)

Powerlink(Qld)

AusGrid(NSW)

EndeavourEnergy(NSW)

EssentialEnergy(NSW)

ActewAGL(ACT)

Energex(Qld)

ErgonEnergy(Qld

)

SAPowerNetworks(SA)

Powercor(Vic)

SPAusNet(Vic)

UnitedEnergy(Vic

)

CitiPower(Vic)

Jemena(Vic)

AuroraEnergy(Tas)

50

0

50

100

150

200

Investmentchange from previous regulatory period Operating expenditurechange from previous regulatory period

Investmentpercentage of asset base

n: c i ul dii, dd dcii b auli Cpii tibul.

suc: aer.

iu 7 illu d i w vu divcpiliv, d pi d ic c.

Cpi uc i cu v ul ccl

wi pviu ccl:

w vu c i (i l ) b

44 p c

iv i c i (i l ) b 27 p c

i ii d 60 p c i diibui

pi d ic c c i (i

l ) b 48 p c i ii d 28 p ci diibui.

hi w vu, iv d pi c

v b div b ix c, wic

quid plic (ci a.3). o div l

lii cu cidi d c. I picul,

ub dii d vl fcd

d upd i w , wbu () dd, d pd c d

i ii p dd.

addiill, cdii i lbl cil

c cpil cd i vu llwc

w i cu ul ccl w iicl

i pplid i pviu pid. t pi

c udpii ic w i db i

piu (wic fc bwi c bui

bd i i dul). Iu i lbl cil

cd liquidi i db d icd pcpi

i l 2008, pui up db i piu.

addiill, rul quid aer ppl db i

piu bv cd b bui i pcic.

t ibili i cil l icd

i piu cd i c qui ( u

quid b ld wd i ivi i

w bui).


16/141

11

MARKETOVE

RVIEW

ire 8

weihted averae cot o capitalelectricity and a ditribtion

Jurisdictional decisions AER decisions

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

Jan2005

Jan2007

Jul2007

Jul2008

Jan2009

Jan2010

Jan2012

Jan2013

WACC(%)

Jul2005

Jul2004

Jan2006

Jan2008

Jul2009

Jul2012

Jan2011

Jul2010

Jul2006

Jul2011

Gas Tribunal decisionElectricity Tribunal decision

Gas regulatory decisionElectricity regulatory decision

n: nil vill WaCC.suc: aer.

t i c cpil uli c ld

v vu ppvl bi 7 p c i i cu

dii i c cpil d id

ucd pviu ud dii.

iu 8 illu WaCC i ul dcii

lcici d diibui w ic 2004.

I l illu w i viw uc cd

picul aer dcii; i vl viw, tibul

ubiud i WaCC did b aer

(ci a.2.1). t cuuliv ipc w , iv

aer pplid tibul dcii i ubqu ul

viw w.

elcici w c will plu i 2013 d

uu ii cu ul

dii, picull cu i nw su

Wl, Quld d su auli. C

nw su Wl w c ll i l

i 201314. addiill, w aer dcii d d

dcii d i 2012 fc iic i i c

div will pu w c i

uu. I picul, c iduil d idil

u, icludi p dd, v b vid dw

(ci a.4); c ipu c l f.

rfci c i pi vi,

aer i 2012 did:

i i c p dd w i

Quld cibud ii iv

qui 201217 bi 16 p c l i

pviu pid

ubdud cic w i ti, wi lw

xpcd dd d w w cci,

cibud diibui iv qui

201217 bi 21 p c l i

pviu pid.

t dvlp v b ccpid b c

i lbl cil v p 18 , wic

v lwd qui d bwi c. I 2011,

aer ducd b 50 bi pi i piu,

ui i lvl i w pi lbl cil

cii. ti c cd dii d i

2011 Quld d su auli diibui

w. m cl, duci i v bd

ild ducd i (lwi c qui

d db). rfci cil dvlp,

WaCC llwc d i 2012 Pwli (Quld

ii) d au e (ti diibui)

w lw pvidd i w pviu

dii d dui lbl cil cii.


17/141


llwi iic c rul i

nvb 2012, aer i dvlpi w uidli

i ppc WaCC (ci a.3.1).

A.2.1 Reviews by the Australian

Competition Tribunal

t lw llw w bui ppl

auli Cpii tibul liid viw

aer dii, p i. nw bui

u viw 22 aer dii bw 2008

d 2012 i lcici ii, 14 i lcici

diibui d v i diibui. t tibuldcii viw icd w vu

b ud $3.3 billi. aud 85 p c vu

ipc l l WaCC d vlu x

ipui cdi ().

I w dcii d i Ju 2012, tibul:

icd Vici lcici diibui vu b

$255 illi i cu ul pid, ici

picl lcici idil bill b 0.51.5 p c

icd Quld d su auli diibui vu b $92 illi i cu

ul pid, ici idil bill

b 2 p c i Quld d 1 p c i

su auli.

Cc plic bu ipc tibul

dcii ld auli v bii wd

viw i viw pvii 2015 2012

(ci a.3.2).

A.3 Reormin netork relationWil lii c pu plc i

, w xpi i p ii p

dd c, d cdii i cil

iicl dv i w c v p

v , w dd dd cibui

c. auli v, plic bdi d

ul v b wi dd iu du w pici i c pvid

cicll ci d libl uppl.

A.3.1 Strengthening o the energy Rules

I spb 2011 aer ubid ppl

aemC, i c rul vi ww bui uld b p ci

iv i, d u , vic l

i cu. Wil cii udl

div i w c, aer cidd

pvii dd i 2006 i plic cc

bu dquc w ivw cui

cu p c vic.

t aer ud:

rul cid x wic i culd

liic d idpd w

ppd xpdiu d

uic ll-i ll cpil xpdiuicludi

u bv aer llwc w

b cd iciv viv

ici ppc i c cpil

lcici d w bui, l wi

ci aer i i c fc cu

ccil pcic, ld ifd c i

culi idd civ

ld .

llwi dild culi, aemC ld rul

c i nvb 2012 aer

cpci w pic cu d p

c cicll ci d

libl uppl. t c:

c c ppc i c cpil

c lcici d w bui, wb aer b pibl i c

bc ci vic pvid i

ul dii i d

qui aer ud ull public viw l

v i ppc i c

cpil, cpli viw b nvb 2013

cli aer pw d d w

vu ppl. addiill, aer will publi

ul bci p liv cic bui

c iciv ci iv b bli

aer viw cul cpil xpdiu

w bui u i w pud d

ci. expdiu i xc ul ppvl

b vd uld b i aer

d i i pud ci


18/141

13

MARKETOVE

RVIEW

cc lcici ul pc u

li, llw civ culi

wi ld. m ii will b d

vilbl l i ul pc cu .

t s slc Ci elcici Pic i

nvb 2012 dd ub .

I picul, i d aer uld b pid

viw cic iicl cpil xpdiu d

dvlp w uidli i u

w bui.

I p rul c, aer will cul wi

ld dvlp w uidli, icludi

i xpdiu ppl, i llwd u

, i iciv ci iv d

civl i wi cu.

I li WaCC, w rul qui aer

i c cpil ccu

cicuc, ii d, cil dl d

lv ii. t aer publid iu

pp i Dcb 2012 i dvlpi i

ppc d i nvb 2013 will li uidli iclud idiciv c cpil p.

aid c ld w rul, aer

i 2012 ciud ipv i ul ppc

b i:

bci ciqu d l d i pplici

i ul dcii, wic w rul will b

bl. t aer i dvlpi bci

idic i culi wi idu, ii

ppl cd ic i ul viw nw

su Wl d aCt lcici diibui w

ii qui bui, ipv

quli d cic d ul viw

d ul pc pi. t c

l i ipv bu ul

dcii i, d pvid d dvlp d ppl

bci ciqu d publi bci

p w bui.

t Pducivi Cii i ocb 2012 ud

bci wuld cpl l cul

pplid i uli, icludi i w

bui ppl.

A.3.2 Review o limited merits

review arrangements

I p plic cc, sCer bu wd viw liid i viw i 2015

2012. tibul dcii d ud i icd

w vu b $3.3 billi bw Ju 2008 d

Ju 2012 (ci a.2.1).

I mc 2012 sCer ppid xp pl

viw i. I i l p, ld i spb

2012, pl ud i pd

idd. I picul, i:

d ucil cid il lcici d bjciv, wic cu l i

cu

plc w cu id viw,

wiu ucil cidi vll blc

dii.

t pl ud liid i viw i i pbl

livuc de novo (ull) viw

lic judicil viw lbu cdd

llwi ipv:

rviw uld b cducd b w diiiv

bd cd aemC.

t i uld b liid il ud

ppl ill pbl dcii xid

uld viw i li il

bjciv u i lili.

a viw uld b iviiv dvil,

wi ipu cu. addiill,

lili uld cli aer l i ii viw bd.

t viw bd uld b xpl pc

dcii i cid lv.

Cag cdd i Dcb 2012 b

cd plic p viw b id2013. I

ppd dd i b i plc b d

2013 i dvc x ud aer dii.


19/141


A.3.3 Testing o the efciency o

new investment

r lcici rul lii

pc l iv pjc

u ci. t ul iv

ii (rIt-t), iducd i auu 2010, qui

w bui di w ppd

iv p cb li pvid l c lui i idid d. t

w bui u publicl cul i ppl,

d cd pi c ld l dipu. t aer

i d c ppl cplic wi

rIt-t; i cducd ub cplic viw i 2012.

t aemC i ocb 2012 lid rul c

iduc rIt-D diibui w.5 t aer

u dvlp d publi rIt-D (d ld pplici

uidli) b spb 2013. t w will ppl iv pjc v $5 illi. t w rul iclud

dipu lui pc, d qui diibui

bui l ul pli p d ii

dd id .

5 aemC, nil elcici ad (Diibui nw Pli d

expi w) rul 2012.

A.3.4 Network reliability arrangements

t d libili qui i div

w iv, pi xpdiu d c. t

d- bw libili d c v

dcii ic libili dd will i cu

bill. t sCer i auu 2011 d iic ipc

diibui iv il lcici pic, d

dicd aemC viw ppc idiibui libili dd c juidici, wi

viw dvlpi il ppc.

I nvb 2012 aemC ppd iduci

ill ci w diibui libili.6

I cdd juidici ciu libili

dd, bu llw ci il ppc bd

upu pc. I l cdd pi d

iciv c b ddid.

I plll wi i bd viw, aemC l viwd c d b libili i nw

su Wl. I auu 2012 p ud duci

i libili dd culd v diibui w

iv $275 illi $1.3 billi v 15 ,

dpdi w uc dd ducd. I

c i wuld v picl cu $315 p ,

c ud 215 x iu u p .

6 aemC, Review o distribution reliability outcomes and standards, drat

reportnational workstream, 2012.

ire 9

Cot and benet o redcin ditribtion reliability, Ne soth wale

1500

1000

500

0

500

1000

1500

Modest reduction Large reduction Extreme reduction Improvement

Change in reliability

Reduction in distribution investment Value of the increase in expected energy not served

Benefit

Benefit

Benefit

Benefit

Cost

CostCost

CostNetpres

entvalue(201112$million)

suc: aemC.


20/141

15

MARKETOVE

RVIEW

t c ud cu vi duci

dd wuld uwi c w libili.

I c, c u ipvi libili wuld

uwi b (u 9).

t s slc Ci i nvb 2012

cdd dpi il w

di libili dd fc cu

vlui libili. I cdd i

aemC wi i pibili. Cag uppd i

cdi i Dcb 2012.

A.3.5 Management o rising energy use

and peak demand

c w i u d p dd b

div w iv d vu

v p v . Wil dd d

i p cdd ud 200708 ( xplid i

ci a.4), auli e m op (aemo)

c w will u i diu l .

e w id wi uci cpci

p dd, wic picll ccu d x w. aud 2030 p c $60 billi

lcici w cpci i nem i idl 99 p c

i. Wil i cpci i dw l

90 u , cid w c ull

pd il cu.

Plic d ul w i 2012 id dvlp ci

w pdi ii p dd. t aemC

Power o choice viw (cpld i nvb 2012)

cud pwi cu i u d v c b ii i cupi

w p i. t aemC cdd:

w illd idil d ll bui

cu uld b ivl wi

cuici cpci. I pd uppl

i d ld d vic b cbl,

wi il vi pi pibili.

ipvi pic il cu b iduci

i vi w i. I d ll d diuizd cu uld b iv cic bw i

vi d f w c. t s slc

Ci cidd i uld b uppd

b cu duci cpi.

pvidi fxibili cu cc

i w cupi d, d w

cu wi uppli dd

vic

bli cu ll ll cl i (

xpl, l b ) pi

i lcici il

llwi picipi b l cu i wll lcici wid

ppuii dd p i i

p pic.

t llu ivl wi i bd d

u d cuici cpbilii

di d cu cci wi cl

aemC cdi. ti p

i, w cupld wi i vi pic, wuld

llw cu v i bill b duci u i p dd. I l , i

cili dic id pi.

Cag i Dcb 2012 ppvd dpi i picipl

ull Power o choice cdi. I l

ppd pi i i vi w c,

d w dd id ci wll

, b Jul 2014.

a Vici llu ivl wi

cuici ll cu i xpcd b

cpld i 2013. all cu will b v

i vi pic Jul 2013. s Vici

bui i 2012 lucd pl bli cu

wi ivl i d i u

d c. t cu c cp u wi

iil uld, i bill bd cupi,

d lcici bud d c p.

I ddii i dvlp, auli

gv i ivi $100 illi i s gid,

s Ci iiiiv, wic i i cpci

id cli. t iiiiv xpl u dvcd

cuici, i d i quip

pvid cu wi ipvd u ii,

ui d vi, d ipv w libili.

I i l cidi pi cc lclid

i (uc l) d bid vicl id.

t p, wic i pi i nwcl d p

sd, u 2010 2013.

t aer pvid dd iciv c

w bui c d ipl -

w ppc dd. t c ud

iviv pjc bd dd cpil xpdiu

udd u ul pc. t aemC

cdd i c cpu wid

b d w dl b bd cu


21/141


ul pid. t aer will viw p llwi

Cag cidi Power o choice viw d ubqu d rul.

o w i dd iclud i

cu i ul pc, icludi

dui aer ul viw w c

(ci a.3.1).

A.4 wholeale electricity market

a i i 201011, p lcici pic ll cd lw i 201112 b iduci cb

pici (ci a.5). av pic i 201112 d

$28 p w u (mW) i Vici $33 p mW

i ti. Lw v pic w id i ll

ub v i pic. ac nem, p pic

xcdd $300 p mW 65 cci, d xcdd

$5000 p mW l c lw icidc ic

cc nem (u 10).

a ub c cibud lw p pic.

I picul, lcici dd ll b 2.5 p c i201112, ciui dclii d ic 200708. t

ll fcd ipc f cic cdii

ccil d iduil dd; ici u

p l i; d cu dpi

cic u uc l w i (pl

i p juidicil cic c).

addiill, ccuiv u blw v

pu cppd p dd b duci u

i cdii. ti l c lp xpli

bc xl i pic.

Dpi lw v pic, w vlili i

su auli, ti d Quld. I picul,

274 iv picl i ti d su

aulicibud lw v p pic

(u 10). t ii icidc iv pic i su

auli li ici u wid i.

Wid bid lw d lil iv

ire 10

Incidence o extremely hih and neative electricity price

0

100

200

300

400 200102

200203

200304

200405

200506

200607

200708

200809

200910

201011

201112

Victoria South AustraliaNew South Wales TasmaniaQueensland

100

200

300

400

500

600

Numberof

intervalsabove$300

Numberof

intervalsbelow

$100

suc: aemo; aer.

M


22/141

17

MARKETOVE

RVIEW

pic u dipc, bcu civ

vlu wbl cic i ddii p

u.

Bu, ll ic su auli pic w

signifcantlyblw z i 201112 (icludi pic ud

$1000 f) w cid wi ic

biddi biddi. o vl cci,

agL e biddi i su auli civl

u dw (icludi wid ).7

hd ti l d pidicll i ic

biddi div iv pic i ti. a i

2009, i w bl widw lw picd cpci

( w dd w d) divup pic. a xp pl blid b ti

gv ccludd i mc 2012 lcici

idu ucu llw hd ti cl il

p pic, pi bi w il. t

p ppd idu , icludi ucui

hd ti di uci i w

wd ii.

t ti gv i m 2012 pdd

p b uci j ci v idu. I dcidd ul lui dd

hd ti pw, llwi

pl cdi ucu i.

1 Jul 2013 oc ti ecic

rul will ul hd ti wll

civii. ti cc pic will b b c

Vici cc pic, fc ppui c

hd ti lli i liv .8 t

ti Pli pd lili ipl i nvb 2012.

Quld p lcici pic w vlil dui

u 201112, wi v 70 p pic xcdi

$100 p mW bw 1 Dcb 2011 d 31 mc

2012 (icludi w pic bv $2000 p mW). tpicll,

v w v dui. six iv

p pic (icludi below$100 p mW) llwd

dui i pic. Cu-pic xp

Quld i nw su Wl ccud dui ci pic v ( i, lcici w fwi

i lw pic i). siil icid

vlili ccud i auuocb 2012.

7 t aer l p pic blw $100 p mW i i wl p. s, xpl, wl p 17 apil 2012 d 2228

apil 2012.

8 Dp tu d ic (ti gv), Energy or

the uture: reorming Tasmanias electricity industry, m 2012.

Wil i vlili picll d w

ci ud gld i cl Quld,

ci cd iciv d ppuii

ifuc dipc b i i didlbiddi (iui bid wiu c i c).

ti bviu xcbd w ci d

vlili.

a aer ud ud w ci ud gld

qul cud didl biddi bw

2009 d 2012. W Quld pic l

$100 p mW i i nw su Wl,

ud ud pw picll fw cu-pic i nw

su Wl, cui iv l idu. siiliu pidicll ccu i d bw nw su Wl

d Vici.

sp pic vlili cu uci d c

c ci dipc i. t icidc

cu-pic xp fw l p diculi il

d ll i d i vlili,

pcill c i u i-il l

idu uci (ci 1.4). t cdii c i

d duc cpii idjii i. t ddiil i c d w

d iv i b i d il, ldi

i c cu ulil b.

t Pducivi Cii cidd pw

iu i i c icill c pic

vlili. I d pil dv i bviu

iv , icludi i di

iu uc pic cp.9

W i plc ii iu ci,cu-pic fw d didl biddi i nem.

t aemC Transmission rameworks review(cd

ii p, auu 2012) cdd c

l u pil

cc dl. t ppl i ic

w vilbili v

ci bu i dipc. ti uc wuld v

ipdi liquidi i cc d

c cpii. t iu cplx, d cidbl i. t aemC xpc cpl

i ii w viw b 31 mc 2013.

9 Pducivi Cii, Electricity network regulatory rameworks, drat

report, ocb 2012, pp. 6312.


23/141


ire 11

Vertical interationelectricity retail and electricity eneration, 2006 and 2012

0

20

40

60

80

100

Queensland

Generation

2006

Retail Generation

2012

Retail

0

20

40

60

80

100

South Australia

Generation

2006

Retail Generation

2012

Retail

Generation

2006

Retail Generation

2012

Retail0

20

40

60

80

100

New South Wales & ACT

Generation

2006

Retail Generation

2012

Retail0

20

40

60

80

100Victoria

Generation

2006

Retail Generation

2012

Retail0

20

40

60

80

100

Tasmania

Origin

EnergyAustralia

AGL

Simply / IP

Red / Snowy Hydro

Momentum / Hydro Tas

Lumo / Infratil

Aurora

Alinta

Government owned

OtherprivatePercent

Percent

Percent

Percent

Percent

mW, w.

n: gi l illd cpci; il i ll lcici cu.

suc: aer i.

M


24/141

19

MARKETOVE

RVIEW

I i ubii viw, aer ud

iu didl biddi d cu-pic fw

iu u w ii u uil

cpiv lui i i plc. I udipli iplid ci (uc d

cc ci pici) i , vi

livl iwd c cu

l .

A.4.1 Market concentration, vertical

integration and market power

Wil v ucull pd

uppl idu i 1990, i c i

i i il ccd. addiill,

il d v dd vicll i

il ucu, w i

i pic vlili i wll . Wil i

ccil ii ccd, vicl

ii duc liquidi d cci pi i

d ; i c c idpd

il d p bi d xpi

b idpd d il.

t ilagL e, oii e d

eaulijil uppl 76 p c il

lcici cu d 85 p c cu i

auli. t ii icd i

i i 11 p c i 2007 35 p c i

2012 (u 11). t ii l xpdi i

i i up pduci, b uppl i

il cu d pvid ul i pwd

i i.

Vicl ii b bui ic 2007 iclud:

agL e d oii e cquii il cu

i Quld u pivii i 200607

oii e d eauli (bdd i

trU) cquii i cc d il

cu i nw su Wl i 2010

agL e, oii e d eauli

clli 58 p c w i cpci

ciid cid ic 2007, il i

pwd d wid i

agL e cquii su auli l

(t Ild) i 2007 d ii i qui i Vici

L y a pw i 32.5 p c

100 p c i 2012.

I ddii, w il ic 2007

vicll id wi ii w pviul d-

l xpl, Iil Pw (di

sipl e i il ), Iil (Lu e)d ali. gv wd l vicll

ii. t sw hd w rd e,

wic p i nw su Wl, Vici d su

auli il . t ti gv wd

hd ti il (mu e).

t aer wl p, l wi pviu

dii State o the energy market, d vidc

pidic xci pw i vl nem

i. a vicll id bui wi iic i i v bili d iciv

ipul p pic i cpi i

il . a div i i

lw p pic, dpdi i iciv (icludi

cc pii). t Pducivi Cii d i

bviu i dicul dc, bcu di pii

ccil-i-cdc. I l d dii

ipc xci pw, icludi

dipc i c pl d lw c pl; did

iciv w iv; d di ci w i il .10

t aemC i 2012 cidd iu pw i

li rul c ppl b mj e U

ic biddi di $300 p

mW i i dd. I i d dii,

aemC ud iuci vidc xci

pw. I i auu 2012 ubii d, aer

cud aemC bd vidc

d licl l i pw i nem.o 30 auu 2012 aemC xdd ii i

l dii 11 apil 2013.

10 Pducivi Cii, Electricity network regulatory rameworks, drat

report, ocb 2012, pp. 6312.


25/141


A.5 Climate chane policieauli i i i u

cui i oii ecic

Cpi d Dvlp (oeCD). t lcici

c cibu ud 35 p c ii,

il du iicl lic cl d i. 11

addiill, auli lw wbl lcici

i; i v lw 28 b

cui Iil e ac (u 12).12

ire 12

Reneable eneration hare o total eneration, 2010

Percentage

ofgeneration

Hydro Wind Geothermal

Solar Biofuels/waste

0

10

20

30

40

50

60

70

80

New

Zealand

Canada

Italy

Germany

France

UnitedState

s

Japan

Australia

UnitedKingd

om

suc: Iil e ac, Energy policies o IEA countries

Australia, nvb 2012 .

auli i cui ipli plici

cu dpi lw cb ii

cli. t cl pl auli cli c

p i cb pic iducd b auligv 1 Jul 2012 p i Cl e

uu Pl. t pl duci i cb d

u ii l 5 p c blw

2000 lvl b 2020 (d up 25 p c wi quivl

iil ci). t cl ci plc xd

11 gu, P r, The Garnaut Review 2011: Australia in the globalresponse to climate change, il p gu Cli C

rviw, 2012.

12 Iil e ac, Energy policies o IEA countriesAustralia,nvb 2012.

pic cb , i $23 p

cb dixid quivl id. t pl iclud

cil ic i i c lw

d iddl ic uld.t xd pic c will b plcd b ii

di c 1 Jul 2015, wi pic did

b . t auli gv i auu 2012

ucd c will, 1 Jul 2015, cll

li auli cb pic pic eU cb

llwc, wic w di ud $10 p i

spb 2012.

m xpci w iduci cb

pici wuld ic v p lcici pic bud $20 p mW. Bu iiil pic c w

uc , wi v p pic i w 17 Jul

2012 i $38 $84 p mW bv 201112

v pic (i nw su Wl d su auli

pcivl). t v p pic c nem

$37 p mW i Ju 2012 $67 p mW i

Jul 2012.

aid cb pici, viu c cibud

ucul uppl d -cb ld ciu, pl u, bl dd d lw

wid upu. addiill, w u cibud

pic p i l Jul. m ll, p pic

i Jul w ci v lw b i 201112.

nl, pic i dicul ccil wi

c l. I picul, ub

id i pic bv lvl quid dju

cb iii i pl.

sp pic dd v llwi w dciud i pi 2012. B id-ocb,

v p pic i nem (ld x pic

v) ic iduci cb pici w bdl

i li wi xpciud $21 p mW

bv v pic Ju 2012.13

t auli gv l p ret c

civ i ci 20 p c wbl

i auli lcici ix b 2020. t c

pvid ubidi wbl iuc wid d l ib quii lcici il

uc ppi i wbl

uc dvlpd 1997. I 2020

41 000 iw u l cl wbl

pjc. Wid i i l ic

v xpdd c i 2007. sll cl

13 aemo, Carbon pricemarket review, 8 nvb 2012.

M


26/141

21

ARKETOVERVIEW

wbl pjc d cibu il ,

bu ill pduc wbl cic ilu cqui.

t Cli C aui w viwi ret

c i 2012, icludi vll , liibili

w d c ipc lcici c,

pic d cui. I dicui pp i ocb

2012, i cdd ii d lvl

2020 l cl wbl pjc, d

viwi i 2016 bd 2020. I l

cdd ii c i i cu ll cl illi. t aui will cid w

iz ld illi uld b ducd.

a l p i xpcd i Dcb 2012.

t idici cli c plici (i

cjuci wi f lcici dd) ci

i ix i nem. nbl, v 3000 w

(mW) cl pl w u dw pidicll fi

dui 2012 (bl 1). ti ducd cpci w pd

c v ild nem i, d d icludVici 1450 mW yllu pw i pi blw

cpci dui wi ul fdi. m pl

w cid lw dd c i i

dcii. t w t (Quld), mu

(nw su Wl), mwll (Vici) d yllu (Vici)

cid cb pici d ipc ret i ii

i w cl wbl uc

cibui c.

l c uu u d p dd

w, cbid wi u xpcd w i wbli dli d w iv

i bld d pi i cpci. rvid

c i 2012 dd w iv qui

b l u i ll nem i, cpd wi

c i 2011. Vici will b i qui

w iv (i u 201819), llwd b su

auli (u 201920) d Quld (u

202021). nw su Wl d ti c

qui w i iv v x dcd.

A.6 gasiic li xi bw lcici d ,

wi pwd i ccui 24 p c

dic dd i auli.14 g l

iduil, ii d ccil pplici.

huld dd i livl ll, xcp i

Vici, w idil dd ci d iccu ud -id l cupi.

auli pic v ll b lw b

iil dd (picll $34 p ijul), bu

dvlp Lng xp cpci i Quld i

xpi auli dic iil

pic. Lng xp xpcd cc

gld i 201415.

14 aemo, Gas statement o opportunities or eastern and southern Australia,

excuiv bi, 2011.

Table 1 generation plant ht don or ofine, 2012

BUSINESS POWER STATION TECHNOLOGYSUMMER

CAPACITY (MW) PERIOD AFFECTED

QUEENSLAND

Stanwell Tarong 2 units Coal red 700 October 2012 to at least October 2014

RATCH Australia Collinsville Coal red 189 Retired

CS Energy Gladstone Coal red 560 Two units not operating JulyDecember 2012

NEW SOUTH WALES

Delta Electricity Munmorah Coal red 600 Retired

VICTORIA

Energy Brix Morwell Unit 3 Coal red 70 From July 2012 until viable

Energy Brix Morwell Unit 2 Coal red 25 Not run since July 2012

EnergyAustralia Yallourn 1 unit Coal red 360 Ofine JulyDecember 2012

SOUTH AUSTRALIA

Alinta Energy Northern Coal red 540 AprilSeptember 2012

Alinta Energy Playord Coal red 200 From March 2012 until viable

suc: aer.


27/141


Wil iduci cb pici i 2012 icd

cpiiv liv cl, wi

uci bu pic will lil ci w

i pwd i vl . m ll, pjcd i i lcici dd i ci

iv iz. t Queensland gas market review

2012 pjcd lil w i pwd i i

uil 2020.15 aemo dlld i 2012 iulu

ret iv i wid i, cbid wi

w pjcd dd, dl iic

i i pwd i uil 2025.16

Wil Lng xp Quld xpcd

bi uil 2014, pjc dvlp cui v udpi uppl cc. ti d i pui

pu dic vilbili d pic. t 2012

Quld viwd c pic icil

bd xp ppui vlu; dic u

w cpi wi Lng w cci uppl. t

p l d liquidi iu i Quld ,

wi i uppl w cc.m ll,

cu i w dic uppl cc

p-2015 ci lc bic ii

(wd pic, vlu vilbl d pil dlivi) cci.17 t auli gv

Energy White Paper 2012 cidd i

pvidi ci pl cci, d uc

i .18

t dvlp Lng pjc i Quld w widl

xpcd i 2011 pduc p-up dic

l livl lw pic. C xpci,

dic l p-up ilid.

Id, pjc dvlp pp b ii v pv pi u Lng i dvlp.19

addiill, eQu cidd pjc

pp b civi i dilli . t Buu

ruc d e ecic d ldw

cc bu ipc cl (Csg)

xci w uc v ld ici

dilli d i ul cl ld cc.20

15 Dp e d W suppl (Quld),2012 Queenslandgas market review, 2012, pp. 2526.

16 aemo, Upublid bi aer, nvb 2012.

17 Dp e d W suppl (Quld),2012 Queensland

gas market review, 2012, pp. 23, 27, 38.

18 auli gv, Energy white paper, 2012, p. 141.

19 Dp e d W suppl (Quld), Queensland gas

market review 2012, 2012, pp. ix, x.

20 Bree, Gas market report, Jul 2012, p. 45.

t i cdii pi. t 2012

Quld viw d w d Lng pp

cc wi , icludi wp. I

dli ud ll u Lng pjc wuld lil xpic ll i i quid v i

pid 2030, d wuld d uc

bd .21

aid dvlp i Quld, c

ci c . eQu d

lc c xpli ucc i Vici.22

I nw su Wl, cplx ul udl v

pd dvlp Csg uc i

gud d gluc bi.23

t nw su Wlgv ld i sic ril Ld U

Plic i spb 2012, clii ul i

xpli d uu dvlp

Csg uc.

al, l cc plc i i

iu; iicl lw picd dic cc will

pivl xpi v x v . Cc

plc civi i xpcd p i Quld i

201516, d i nw su Wl d Vici i 2018.t xpii lw picd cc d i ii

i xpd lbl pic will ciu plc

pu dic pic.24

t, c cui uci i

d ipci pic. t Buu

ruc d e ecic pdicd

wll pic will cv wd lbl pic i

icipi Lng xp 201415.25 t 2012

Quld viwpdicd Quld dic

pic culd i $6.5010 p ijul b 2015

(dpdi iil cdii). I

pdicd dic pic $712 p ijul i 2020.

t dli idicd widi divc bw

Quld dic pic d livl lw pic i

u . tpi c will lil ci

fw Vici i Quld, ul pic

diil bc ucil wid.

ovll, viw pdicd u ii i

201415 u 2021, w

vlu ucvil uc l

21 Dp e d W suppl (Quld), Queensland gasmarket review 2012, 2012, pp. ix, x.

22 eQu, Energy Quarterly, auu 2012, p. 22.

23 Bree, Gas market report, Jul 2012, p. 56.

24 Dp e d W suppl (Quld), Queensland gasmarket review 2012, 2012, p. 23; Bree, Gas market report, Jul 2012,pp. 50, 66.

25 Bree, Gas market report, Jul 2012, p. iv.

MA


28/141

23

ARKETOVERVIEW

Cp Bi d Csg nw su Wl

bc vilbl. 26 aCIL t l cidd

dvlp l cp pic

ud 2021.27

aemo dld i 2012 auli uci

v dd v pid 2032,

bu pd dvlpi w v i cucil. I

d livl ll vlu ucid pvd

plu pbbl (2P) v, cbid wi l

ppi v bi d Lng xp,

c cll dic uppl.

aemo ud 15 p c duci i v dvlp

culd cu uppl ll Lng xp ddic 2016.28 Wil ll Lng

cc blii culd b llvid b divi Cp

Bi dic , i divi wuld

lil c nw su Wl dic . ti

ci wuld p ppuii u dvlp Csg

v i nw su Wl (i gud, gluc

d sd bi) d xpd pipli cpci

p dd c.

t Energy White Paper 2012 idid auli gv i cidi wi d i

v llvi iil pu i

. t iclud:

dvlpi il uppl ub di dl

c pc d libili uppl.

e ii cduld i Dcb 2012

cid pi ipli di ub

Wllubill i Quld.

lii id p cc udud (buccd) cpci pipli c

di ppuii.

alid , auli gv i

wi u sCer dvlp ill id

ul w Csg idu; c

uddi ipc Csg dvlp

udw d vi; d dvlp wld

cl ulipl u w p cxic.29

26 Dp e d W suppl (Quld), Queensland gasmarket review 2012, 2012, pp. vii, 27, 37.

27 aCIL t,nil ul: dic pic d ,

Pi b Pul Bl, 30 m 2012.

28 aemo, Upublid bi aer, nvb 2012.

29 auli gv, Energy White Paper2012, p.xxi.

A.6.1 Spot gas prices

t Vici wll d

di i sd, adlid d Bib pvid

d p pic. Wil pic i ll ub d

b i i wi i u, pic bv $4 p

ijul w uc uil wi 2012. a p c

i pic ccud i i, wi l v i ll

cii ii $58 p ijul. Cpd wi Jul 2011,

v pic i Jul 2012 w ud 85 p c i

i sd, 69 p c i i adlid d 62 p c

i i Vici (u 13).

Wi pic pd $17.30 p ijul i sd

( 23 Ju 2012), $14.89 p ijul i adlid (4 Jul), $15.57 p ijul i Vici ( 7 Jul) d v

$8 p ijul i Bib ( vl d i Jul). Pic

b dui auu d ud lvl blw

$5 p ijul i spb 2012, bu id wll

bv l v.

t iic ii i cc i

auli lil cibud pic pi i

wi 2012. al, pwd i icd i

wi 2012, lu vll dd w livlbl. a u Bg pduci cili

ipcd Vici uppl. aemo pd p

pic w ll ucd b iduci cb

pici 1 Jul 2012.30

Wil c uc c i cc pii i

v fwd u p pic, aer dcd

ic picip biddi i p

i pic d d divi pic i

wuld wi b c. ti bviu w vidi b di d Vici

. I picul, i i v

cd ppuii picip ifuc

pic uc u ic biddi. ti ifuc

i idicd b iic vii bw c d

cul pic. Lid i vii w p quli

dd c b picip ub d.

t aer iquid i picip dd c,

d bid v wi pid, d will p cplic iu.

30 aemo, Carbon pricemarket review, 8 nvb 2012.


29/141


A.7 Reormin retail enery markets d i v pivl

ipli il id i il

w civl. t nil e ril

Lw ppli , wic ccd i ti

d aCt 1 Jul 2012. su auli d nw

su Wl ucd ipli d 1 bu 2013 d 1 Jul 2013 pcivl. Vici

cid ipli Lw pcicbl

d l 1 Ju 2014 (pvidi udi

iu lvd).

t ril Lw i p il cpii d

pw cu i cc ui

i d. I pii cu i

uc dip, il ilu, cc diibl

ii, d dicci.

o 1 Jul 2012 aer lucd e md e

pic cp (www.d.v.u) lp

ll cu cp vilbl .

t wbi l pvid ii ,

u, d cu i d blii. t

pic cpi uci i vilbl cu i ll

juidici ppl ril Lw.

B plci -b- uli wi il

ppc, ril Lw bli cic i

uc cplic d c, pc

pi, uii ll (d xpi

qui) d pci i il

bui il. acivi il cic i

will c iic cici il pi i

ulipl juidici.

t ril Lw p lid auli

Cu Lw pw il cu. t

auli Cu Lw, iducd 1 Ju 2011,

d cu pci i , icludi

i li d--d lli. Wil iil

cil auli

bi cpiiv i wld, cpii

w cu iid il i civi.

D--d i i widl ud i idud ccu l ll w cc

ud illi w cc uld d-

-d i i 2011.31 t u wici

wbi l icd.

31 & sulliv, Research into the door-to-door sales industry in Australia,

rp aCCC, 2012, p. 11.

ire 13

spot a priceeekly averae

$

pergigajoule

0

1

2

3

4

5

6

7

8

9

10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sydney 2011 Sydney 2012 Melbourne 2011 Melbourne 2012 Adelaide 2011 Adelaide 2012

n:

Vlu wid x pic. sd d adlid d di pic i c ub. mlbu pic i

pli , bd Vici wll p pic plu aPa gup cu ii widwl i ($0.3685 p ijul) wmlbu pli z.

suc: aemo (sd d adlid); aer i (mlbu).

MA


30/141

25

ARKETOVERVIEW

D--d l bl il i d

cu cidd p wici il. addiill,

uuci l d--d pid

cii bi i l xpiv udi i. hwv, d--d i

pcic ivlv iv l bviu.

t auli Cpii d Cu Cii

(aCCC) c auli Cu Lw, icludi

i pci cu ipp cduc

b d--d lppl. t pvii l

ulicid l, ildi d dcpiv cduc, d

uccibl cduc.

t aCCC ci i 2012 i il d wici i lld bc auli

Cu Lw. I mc 2012 i ld pcdi i

agL e d nibud e, d i

cpi d b , ildi d dcpiv

cduc i d--d lli. al, aCCC lld

c pd ild idil lv pi

qu ccupi. I spb 2012 dl

Cu ud nibud e d i i

cc d bcd auli Cu Lw, d

i ipd pli $1 illi. a nvb 2012

agL e w b dl Cu.

I Jul 2012 dl Cu dd e Wc

pvid pic cpi vic p

$1.95 illi ildi dvii. I l dd

ci xcuiv c e Wc p

$65 000 i l i dvi. t dvii

ld pi u e Wc

vic d vi cu wuld b

wici il.

mi


31/141

1 natIonaLeLeCtrICIty market

hydtm


32/141


33/141


t nil elcici m (nem) i wll

i wic ll lcici i d

u auli. t i cu il,

wic budl lcici wi w vic l idil, ccil d iduil u.

t cv ix juidiciQuld, nw

su Wl, auli Cpil ti (aCt), Vici,

su auli d ti picll lid

b iccd ii w. I ud

200 l , v bd ii

w (lid b c-bd icc) d

13 j diibui w uppl lcici d

u cu. I pic p, nem i

l ciuu li cu i wld,

cvi dic 4500 il.

Table 1.1 National Electricity Market at a lance

Participating jurisdictions Qld, NSW, Vic,SA, Tas, ACT

NEM regions Qld, NSW, Vic,SA, Tas

Installed capacity 48 311 MW

Number o registered generators 308

Number o customers 9.7 million

NEM turnover 201112 $6 billion

Total energy generated 201112 199 TWh

National maximum winter demand 201112 31 084 MW1

National maximum summer demand 201112 30 322 MW2

mW, w; tW, w u.

1. t xiu iicl wi dd 34 422 mW ccud i 2008.2. t xiu iicl u dd 35 551 mW ccud

i 2009.

suc: aemo; aer.

1.1 Demand and capacityt nem uppli lcici l 10 illi idil

d bui cu. I 201112 d

199 w u (tW) lcici 2.5 p c

duci pviu , fci d dclii dd ic 200708 (u 1.1). e

dd wd ul :

ccil d idil cu pdi

ii lcici c b duci u d

dpi cic u uc l

w i

di cic w d w

dd ucui c

ici u p l pvlic (PV)

i, wic i duci dd

upplid u id b il .

ire 1.1

National Electricity Market electricity demand, by reion

Terawatthours

0

50

100

150

200

250

199900

200001

200102

200203

200304

200405

200506

200607

200708

200809

200910

201011

201112

Queensland New South Wales Victoria

South Australia Tasmania Snowy

Tasmanian entry

n: t sw i w blid 1 Jul 2008. I dd

w diibud bw Vici d nw su Wl i d.

suc: aemo; aer.

t auli e m op (aemo) pjcd

ul dd will b f i 201213 d w

ull b ud 1.7 p c v x dcd.1

m w i lid j iduil pjc i

Quld. t w c iicl lw

d 12 , d il dd

c 201213 w vid dw b 8.8 p c.

g e m id p PV i d

l w i, uppd b wbl

(ret) d cic c, ccud

53 p c duci i dd ic 2008.2

elcici dd fucu uu d (uull

pi i l vi) d (pi i wi

i d u i cdiii). ov ,

dd picll c i zi dul d

x pu, w i cdiii ( i)

ld i. P dd dil dui uc

p dcd, fci ucci u

d ici u i cdii (u 1.2).

1 aemo, National electricity orecasting report 2012, 2012, p. 3-1.

2 g e m, Impact o market based measures on NEM powerconsumption: report or the REC Agents Association and the Energy

Efciency Certifcate Creators Group, 2012.

CHAPTER


34/141

29

R1

NatioNa

l

ElEctricity

MarKEt

ire 1.2a

Annal actal and orecat peak demand, by reion

Megawatts

TasmaniaSouth AustraliaVictoriaNew South WalesQueensland

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

199900

200001

200102

200203

200304

200405

200506

200607

200708

200809

200910

201011

201112

201213

201314

201415

201516

201617

201718

201819

201920

202021

202122

suc: aemo; aer.

ire 1.2b

Electricity peak demand, by reion2012 and 2011 orecat

Megawatts

Tasmania 2012South Australia 2012Victoria 2012New South Wales 2012Queensland 2012

Tasmania 2011South Australia 2011Victoria 2011New South Wales 2011Queensland 2011

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

201314201213 201415 201516 201617 201718 201819 201920 202021

suc: aemo; aer.


35/141


t ppi auli uld wi i cdiii

vpiv cli 59 p c i 2005

73 p c i 2011.3

a ild u, cbid wi l di i

dd, ld p dd lli i i

i 201112 (bl 1.2). t dc w vid i

nw su Wl (dw 11.8 p c i 201011

cd) d su auli (dw 13.5 p c). P

dd i Vici w 13 p c lw

iicl p i 200809.

aemo pjcd p dd will u piiv

w 201213 i ll i, bu vl

u i iicl p i nw su Wl,Vici d su auli (u 1.2). m ll,

cu c w i p dd

cidbl pjcd 12

(u 1.2b).

subdud lcici dd fwd u

iicll lw p pic (ci 1.5). I 2012 i

cibud ud 3000 w (mW) cl pl

bi u dw pidicll fi (ci 1.2.2).

1.2 generation in the NEMm lcici dd i nem juidici i b

ui cl, , d d wid cli.

t ll pduc u

il aemo . iu 1.3 illu

lci j i nem.

1.2.1 Generation technologies

a c lcici b ui u

ubi, i l pi iid cil

cduci wi. I auli, lcici i il pducd

b bui il ul (uc cl d ) c

puid . t i cd u ubi

3 auli Buu siic, Household energy use andconservation 2011.

i pu div . o p

l wbl uc uc u

wid.

ec i cl uiqu cciic

xpl, wil cl c qui up

48 u up, pwd d dlcic

i c b d livl quicl. Wid i

li w cdii, i ii. ec p

l iicl di cb ii,

l wi di pi c ucu.

t dd lcici i c, vi wi

i d, d bi pu. a ix

i cpci i u dd, pd dd cciic. t ix ci bld,

pi, idi d ii i.

Baseloadpl, wic bul dd, d

v livl lw pi c bu i -up

c, i i cicl u i ciuul. Peaking

v i pi c d lw -up

c, d ud uppl bld w pic

i (picll, i pid p dd). Wil

pi xpiv u, u bcpbl bl quic -up bcu

b clld p ic. Intermediate

p qul pi pl,

bu ciuul. Intermittenti, uc wid

d l, c p l w w cdii

vubl.

ac nem, blc d bw cl ccu

57 p c id i cpci, bu i

bld pl uppli 79 p c upu (u 1.4).Vici, nw su Wl d Quld l cl

vil d i (u 1.5).

Table 1.2 Peak demand roth, by reion, 201112

QLD NSW VIC SA TASChange rom 201011 % 1.2 11.8 5.3 13.5 0.7

Change rom historical peak % 2.3 11.8 13.1 13.5 2.7

Peak year 200910 201011 200809 201011 200708

suc: aemo; aer.

CHAPTER


36/141

31

1

NatioNa

l

ElEctricity

MarKEt

ire 1.3

Lare electricity enerator in the National Electricity Market

Colongra

Bayswater

Mount PiperWallerawang

Uranquinty

Broken HillPlayford

Mintaro

Clements Gap

SnowtownMount Millar

Cathedral Rocks

Osbourne

Wattle Point

Torrens Island

SnuggeryCanunda

Lake Bonney 1, 2 & 3

Northern

HallettHallett 1

Hallett 2

AngastonPelicanPoint

PortLincoln

Starfish Hill

LadbrokeGrove

McKayKiewaEildon

SomertonChallicum Hills

NewportLaverton

Anglesea

Hazelwood

BloweringUpper Tumut

Tumut

Burrinjuck

RedbankLiddell

Hunter Valley

EraringVales Point

TallawarraShoalhaven

Brown Mountain

Guthega

Yallourn Loy Yang A & BJeeralang

Morwell

Tamar Valley

PoatinaTungatinah

GordonJohn Butters

Reece

Woolnorth

Bairnsdale

MELBOURNE

ADELAIDE

HOBART

SYDNEY

CANBERRA

BRISBANE

Barron Gorge

Kareeya

Collinsville

BarcaldineStanwell

Roma Condamine

WivenhoeOakeyMillmerranBraemar

Kogan Creek

Callide A, B & C

Yabulu

Mackay

Gladstone

Swanbank

Tarong NorthTarong

Mount StuartInvicta Mill

MurrayDartmouth

Dry Creek

Darling Downs

Yarwun

Woodlawn

GunningCapital

North Brown Hill

Waterloo

Quarantine

Valley Power

Waubra

Portland

Yambuk

Bluff

Mortlake

OaklandsHill

Power station size:

> 1000 MW

5001000 MW< 500 MW

Power stations:

Transmission network

Coal

Gas

Hydro

Diesel/fuel oil/multi-fuel

WindBiomass/bagasse

suc: aemo; aer.


37/141


ire 1.4

Reitered eneration, by el orce, 201112

Percentoftotalgeneratio

n

0

10

20

30

40

50

60

Blackcoal

Browncoal

Gas Hydro Wind Liquid Other

Capacity Output

suc: aemo; aer.

ire 1.5

generation capacity, by reion and el orce,

30 Jne 2012

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

Megawatts

Wind

HydroGasBrown coalBlack coal

Liquid Other

TasSAVicNSWQld

n: nw su Wl d Vici iclud sw hd cpci llcd i.

suc: aemo; aer.

g pwd i ccu 21 p c id cpci c nem bu idi

d pi pluppli l 11 p c upu.

a nem juidici, su auli i

li pwd i. m ll,

54 p c w i iv v p

dcd b i pl.

hdlcic i ccu 16 p c

id cpci bu l 7 p c upu. tbul ti i i dlcic. t i l

d i i Vici d nw su Wl (il

sw hd).

t l ii wid i i xpdi ud

cli c plici uc ret (ci 1.2.2).

nill, wid i ccu 4 p c

cpci d 3 p c upu. I su auli,

wv, i p 24 p c cpci, d

i ccud 27 p c upu i 201112(u 1.6).4 o picul d, wid ccud

up 65 p c l i i (d up

86 p c i di ivl).

hwv, wid i i ll lw i p

dd v, i cibu l 9 p c

uppl iv i dui u. y, i

vidc wid i i vi di ipc

lcici pic i su auli; p pic

picll i i lw wid.5

t x w iv i ii i ld

c i w wid i i id i

. sic 31 mc 2009 w wid

30 mW v b clid i-cduld, d

picip i cl dipc pc.

4 aemo,2012 South Australian electricity report, 2012, p. 16.

5 aemo, South Australian wind study report, 2012, p. 2-1.

ire 1.6

wind eneration hare o total eneration, by reion

Percentoftotalregionalgenerat

ion

0

5

10

15

20

25

30

200506

200607

200708

200809

200910

201011

201112

New South WalesQueensland Victoria

South Australia Tasmania

suc: aemo; aer.

CHAPTER1


38/141

33

1

NatioNa

l

ElEctricity

MarKEt

Rooftop solar generation

Cli c plici, icludi ret d

ubidi p l PV illi, ld pid

ic i l PV i v p u .

t ubidi iclud d-i i c blid b

d i v, ud wic diibu

il p uld lcici d

p illi; ubidi cvd u u lcici c.

rp PV i i dd u nem

. Id, illi w civ duci

i i bill. aemo u cibui

p PV i duci i dd,

i i duc cui

qui il id (u 1.7).

Illd p PV cpci 23 mW i 2008

ud 1450 mW i bu 2012.6 t cibui p illi ul qui

i xpcd i 0.9 p c i 201112

1.3 p c i 201213. t up

b pcill iic i su auli, wic

i v uli ii nem

6 aemo, Rootop PV inormation paper, 2012, p. iii.

juidici. I 201112 l PV illi i su

auli d ud 306 iw u (gW),

2.4 p c ul qui.

t cibui p PV illi p dd

i ll lw d cpci. I

ild i, u dd picll p i l

, w p PV i i dclii

i idd lvl d i pi 2838 p c cpci. mxiu dd i ti picll ccu

wi vi, w p PV i i liibl.

aemo xpc up p illi f

u uil 2017, du il duci d-i i,

bu ccl 2018.7 t cibui p

PV i i c i 3.4 p c nem

qui b 202122; i su auli, i i

c c 6.4 p c.8

1.2.2 Climate change policies

t p i cli c nem

i vlvi i p clicl c d

v plici ii cli c. t

lcici c cibu ud 35 p c il

7 aemo, Rootop PV inormation paper, 2012, p. iii.

8 aemo, National electricity orecasting report 2012, 2012, pp. 3-1, 6-1.

ire 1.7

orecat contribtion o rootop PV eneration to meetin enery demand

0

Terawatthours

50

100

150

200

250

Energy PV output

200809

200910

201011

201112

201213

201314

201415

201516

201617

201718

201819

201920

202021

202122

202223

202324

202425

202526

202627

202728

202829

202930

203031

203132

D uc: aemo c.


39/141


u ii, il du iicl

lic cl d i.9 Cli c plici

i c cic div w iv

d i lic cl d i wd l

cb iiv uc.

t cl pl auli cli c p i

cb pic iducd b auli gv

1 Jul 2012 p i Cl e uu Pl.

t pl, v b wl cd Cli C

aui, duci i cb d

u ii l 5 p c blw 2000

lvl b 2020 (d up 25 p c wi quivl

iil ci). t cl ci plc xd

pic cb , i $23 p

cb dixid quivl id. t xd pic will

b plcd b ii di c

1 Jul 2015, wi pic did b . t

lili bli c icludd iil

pvii f d cili pic. eii wuld b

ild cqui up 50 p c i ul cb

libili ui iil ii duci ui (cd

u c up ud k Pcl).

t auli gv ucd c

c i auu 2012 li auli d

eup Ui (eU) ii di ud

fi pic c bi i 2015. t c will

pi auli i u eU ii llwc

up 50 p c i cb libili. ad

will duc 12.5 p c x wic i

c u iil ii duci ui. t

v will l bd cb f pic. I

c, 1 Jul 2015, auli cb pic will bcll lid pic eU llwc, wic w

di ud $10 p i spb 2012.

t Cl e uu Pl iclud ic (c

d cb pi) ii iiv ,

id $5.5 billi. I l blid Cl

e ic Cpi, wi cc $10 billi

v v iv i wbl d lw

ii .

a ppl auli gv cc clu up 2000 mW cl d i b 2020

did pcd. t v id wi

w v i ii cl i Quld,

Vici d su auli, bu pi culd

pic.

9 gu, P r, The Garnaut Review 2011: Australia in the globalresponse to climate change, il p gu Cli C

rviw, 2012.

t auli gv l p il ret

c, wic i vid i 2011. t c i did

civ v ci 20 p c

wbl i auli lcici ix b

2020. I qui lcici il uc ppi

i wbl uc dvlpd 1997.

ril cpl wi c b bii wbl

cic cd c w u (mW)

liibl wbl lcici ccdid pw

i , liibl l w ll

i ui .

t c ppli di ll cl

d l cl wbl uppl. I 2020

41 000 gW l cl wbl

pjc. sll cl wbl pjc l

cibu il , bu ill pduc wbl

cic il u cqui. sic

2011 vii ret c, cic l

cl pjc v dd ud $3540 (bx 1.1). t

pic cic ll cl pjc b

vlil, di $2033.

t Cli C aui w viwi ret

c i 2012, icludi vll , liibili

w d c ipc lcici c,

pic d cui. I dicui pp i ocb

2012, i cdd ii d lvl

2020 l cl wbl pjc, d

viwi i 2016 bd 2020. I

l cdd ii c ll cl

illi i i cu . t ui will cid

w iz ld illi uld b

ducd. a l p i xpcd i Dcb 2012.

Impacts of climate change policies on

electricity generation

t u blc d bw cl lcici i

pd i 200809 d ic dil dclid

(u 1.9). Wil dd l dclid ic

200809, pwd i v p

dcd, fci w iv i ll i nem.

Wid i i l, picull ic 2007

xpi ret c icd d

xdd i 2020.

nw iv p l ci. I 10

Ju 2012, lcici i bui i

auli ivd i 4700 mW pwd i

cpci, cpd wi 750 mW cl i

CHAPTER1


40/141

35

NatioNa

l

ElEctric

ity

MarKEt

ire 1.9

el mix in enery eneration, by enery orce

199900 200001 200102 200203 200304 200405 200506 200607 200708 200809 200910 201011 201112

Black coal Brown coal Gas Hydro Wind

Terawat

thours

20

40

60

80

100

120

140

suc: aemo; aer.

Box 1.1 Certifcate pricesrenewable energy target

iu 1.8 illu pic large generation certifcates

(pviul wbl cic) iud ud

ret c, wi pic pid p mW i

wid d qulii wbl . Wid

civ b cic picand

wll p pic lcici.

s pic v fc c c d

uci bu pibl c. t dcli i

pic i 2009 fcd iic uppl cic

p PV d ll cl illi. I

ld c i c p ll d

l .

ire 1.8

Lare eneration certicate price

0

10

20

30

40

60

50

$permegawatthour

Jun2001

Dec2001

Jun2002

Dec2002

Jun2003

Dec2003

Jun2004

Dec2004

Jun2005

Dec2005

Jun2006

Dec2006

Jun2007

Dec2007

Jun2008

Dec2008

Jun2009

Dec2009

Jun2010

Dec2010

Jun2011

Dec2011

Jun2012

suc: Duc B m rc, Utilities meter, 5 ocb 2012.


41/141


cpci.10 k C pw i i Quld w

l j w iv i cl d ii pid. nw iv i wid i w

l iic.

Blb id $18 billi will b ivd bw

2011 d 2018 i wid pjc, lid

$16 billi i l PV d $400 illi i l l.

t i d ccu up $10 billi

pjc ci Cl e ic Cpi

pvid.11

t idici cli c plici cd

i ix i nem dui 2012. nbl, v

3000 mW cl pl w u dw pidicll fi

dui (bl 1.3). ti ducd cpci w

pd c v ild nem i, d did

iclud Vici 1450 mW yllu pw i pi

blw cpci dui wi ul fdi.

a ub ild cf lcici dd,

iduci cb pici d ipc

ret i ii i w cl wbl

ucpp v cibud duci i

cl cpci. m pl w cid lw dd

c i i dcii. t w t

10 aCIL t, nil ul: dic pic d ,Pi b Pul Bl eUaa cc, 30 m 2012.

11 t all Culi gup, Client update:renewed energy in renewableenergy, 25 spb 2012.

(Quld), mu (nw su Wl), mwll

d yllu (Vici) cid cli c plici cibui c.

1.2.3 Generation market structure

Piv ii w bul i cpci i

Vici d su auli, wil public cpi w

cl ji cpci i nw su Wl d

Quld. t ti i c i

l i v d. tbl 1.4 li wip i bui. iu 1.10 illu wip

j pl i c i.

I Vici, piv ii j pl:

agL e (27 p c cpci), Iil Pw

(22 p c) d eauli (l trU,

21 p c). agL e cquiii L y a

pw i i Ju 2012 ( pviul wi

-id ii i) lid i i

Vici i 5 p c. oii e

ciid w pi pl ml i

2012i pl i Vici. t v wd

sw hd w bu 18 p c i

cpci, l cpii iicl iv

cid wi sw mui c.12

12 t nw su Wl, Vici d auli v jil w

sw hd.

Table 1.3 generation plant ht don or ofine, 2012

BUSINESS POWER STATION TECHNOLOGYSUMMER

CAPACITY (MW) PERIOD AFFECTED

QUEENSLANDStanwell Tarong 2 units Coal red 700 October 2012 to at least October 2014

RATCH Australia Collinsville Coal red 189 Retired

CS Energy Gladstone Coal red 560 Two units not operating JulyDecember 2012

NEW SOUTH WALES

Delta Electricity Munmorah Coal red 600 Retired

VICTORIA

Energy Brix Morwell Unit 3 Coal red 70 From July 2012 until viable

Energy Brix Morwell Unit 2 Coal red 25 Not run since July 2012

EnergyAustralia Yallourn 1 unit Coal red 360 Ofine JulyDecember 2012

SOUTH AUSTRALIA

Alinta Energy Northern Coal red 540 AprilSeptember 2012

Alinta Energy Playord Coal red 200 From March 2012 until viable

suc: aer.

CHAPTER1


42/141

37

NatioNal

ElEctric

ity

MarKEt

ire 1.10

Market hare in electricity eneration capacity, by reion, 2012

Other 9%

AGL Energy 4%

Alinta Energy 4%

Arrow Energy 5%

InterGen 7%

Origin Energy 8%

Stanwell Corporation 31%

CS Energy 33%

Queensland

Other 6%

EnergyAustralia 9%

Infigen 9%

Origin Energy 10%

Alinta Energy 12%

International Power 18%

AGL Energy 36%

South Australia

Other 7%

Delta Electricity 12%

Snowy Hydro 15%

EnergyAustralia 16%

Origin Energy 22%

Macquarie Generation 28%

New South Wales

Other 7%

Origin Energy 5%

Snowy Hydro 18%

EnergyAustralia 21%

International Power 22%

AGL Energy 27%

Victoria

Aurora Energy 14%

Hydro Tasmania 86%

Tasmania

n:

Cpci i ubjc pw puc i ibud p wi cl v upu.

exclud pw i d u cl dipc.

suc: aer.

T bl g i i d hi 20 2


43/141


Table 1.4 generation capacity and onerhip, 2012

GENERATING BUSINESS POWER STATIONSCAPACITY

(MW) OWNER

NEM Regions

QUEENSLAND TOTAL CAPACITY 12 421

Stanwell Corporation Stanwell;Tarong; Tarong North; Swanbank;Barron Gorge; Kareeya; Mackay Gas Turbine;others

3 853 Stanwell Corporation Qld Government

CS Energy Callide; Kogan Creek;Wivenhoe 1 954 CS Energy Qld Government

CS Energy Gladstone 1 680 Rio Tinto 42.1%; NRG Energy 37.5%; others20.4%Contracted to CS Energy

Origin Energy Darling Downs; Mt Stuart;Roma 1 038 Origin Energy

Callide Power Trading Callide C 900 CS Energy Qld Government 50%; InterGen 50%

Millmerran Energy Trader Millmerran 856 InterGen 50% China Huaneng Group 50%;

others 50%; China Huaneng Group 50%Arrow Energy Braemar 2 495 Arrow Energy Shell 50%; PetroChina 50%

Braemar Power Projects Braemar 1 435 Alinta Energy

AGL Hydro Oakey 282 ERM Group 75%; Contact Energy 25%Contracted to AGL Energy

AGL Hydro Yabulu 235 RATCH AustraliaContracted to AGL Energy / Arrow Energy

RTA Yarwun Yarwun 155 Rio Tinto Alcan

QGC Sales Qld Condamine 144 BG Group

AGL Energy German Creek; KRC Cogeneration;others 78 AGL Energy

Pioneer Sugar Mills Pioneer Sugar Mill 68 CSR

EDL Projects Australia Moranbah North 46 EDL Projects Australia

CSR Invicta Sugar Mill 39 CSR

Ergon Energy Barcaldine 34 Ergon Energy Qld Government

NEW SOUTH WALES TOTAL CAPACITY 17 035

Macquarie Generation Bayswater; Liddell;Hunter Valley 4 824 Macquarie Generation NSW Government

Origin Energy Eraring;Shoalhaven 3 162 Eraring Energy NSW GovernmentContracted to Origin Energy

Snowy Hydro Blowering; Upper Tumut; Tumut; Guthega 2 564 Snowy Hydro NSW Government 58%; VicGovernment 29%; Australian Government 13%

EnergyAustralia Mt Piper; Wallerawang; 2 340 Delta Electricity NSW Government

Contracted to EnergyAustraliaDelta Electricity Vales Point B;Colongra;others 2 048 Delta Electricity NSW Government

Origin Energy Uranquinty;Cullerin Range 670 Origin Energy

EnergyAustralia Tallawarra 420 EnergyAustralia CLP Group

Ingen Energy Capital; Woodlawn 188 Ingen Energy

Marubeni Australia PowerServices

Smitheld Energy Facility 162 Marubeni Corporation

Redbank Energy Redbank 145 Redbank Energy

Eraring Energy Brown Mt; Burrinjuck; Warragamba;others 116 Eraring Energy NSW Government

EDL Group Appin; Tower; Lucas Heights 108 EDL Group

AGL Hydro Copeton; Burrendong; Wyangala;others 83 AGL Energy

Essential Energy Broken Hill Gas Turbine 50 Essential Energy NSW Government

Acciona Energy Gunning 47 Acciona Energy

Inratil Energy Australia Hunter;Awaba 30 Inratil

VICTORIA TOTAL CAPACITY 11 531

AGL Energy Loy Yang A 2 190 AGL Energy

Snowy Hydro Murray; Laverton North; Valley Power 2 083 Snowy Hydro NSW Government 58%;Vic Government 29%; Australian Government13%

International Power Hazelwood 1 600 International Power / GDF Suez 91.8%;Commonwealth Bank 8.2%

CHAPTER1

NEM


44/141

39

NatioNal

ElEctric

ity

MarKEt

GENERATING BUSINESS POWER STATIONSCAPACITY

(MW) OWNER

NEM Regions

EnergyAustralia Yallourn Yallourn; Longord Plant 1 511 EnergyAustralia CLP Group

International Power Loy Yang B 965 International Power / GDF Suez 70%; Mitsui 30%Ecogen Energy Jeeralang A and B; Newport 891 Industry Funds Management Nominees

Contracted to EnergyAustralia

AGL Hydro Kiewa;Somerton; Eildon; Clover; Dartmouth;McKay;others

810 AGL Energy

Origin Energy Mortlake 518 Origin Energy

Pacic Hydro Yambuk; Challicum Hills; Portland;Codrington

265 Pacic Hydro

Acciona Energy Waubra 192 Acciona Energy

Alcoa Angelsea 156 Alcoa

Energy Brix Australia Energy Brix Complex;Hrl Tramway Road 104 HRL Group / Energy Brix Australia

Alinta Energy Bairnsdale 70 Alinta EnergyContracted to Aurora Energy Tas Government

AGL Energy Oaklands Hill 63 Challenger LieContracted to AGL Energy

SOUTH AUSTRALIA TOTAL CAPACITY 4 392

AGL Energy Torrens Island 1 280 AGL Energy

Alinta Energy Northern 546 Alinta Energy

International Power Pelican Point;Canunda 494 International Power / GDF Suez

Synergen Power Dry Creek; Mintaro;Port Lincoln; Snuggery 317 International Power / GDF Suez

TRUenergy Hallet;Waterloo 309 EnergyAustralia CLP Group

Origin Energy Quarantine; Ladbroke Grove 256 Origin EnergyIngen Energy Lake Bonney 2 and 3 182 Ingen Energy

Origin Energy Osborne 175 ATCO 50%; Origin Energy 50%

Inratil Energy Australia Snowtown;Pt Stanvac 147 Inratil

AGL Energy Hallett 2; Wattle Point 135 Energy Inrastructure TrustContracted to AGL Energy

AGL Energy North Brown Hill 82 Energy Inrastructure Investments Marubeni50%; Osaka Gas 30%; APA Group 20%Contracted to AGL Energy

Ingen Lake Bonney 1 81 Ingen EnergyContracted to Essential Energy NSWGovernment

Meridian Energy Mount Millar 70 Meridian Energy

EnergyAustralia Cathedral Rocks 66 EnergyAustralia CLP Group 50%;Acciona Energy 50%

AGL Energy Hallett 1 59 Palisade Investment PartnerContracted to AGL Energy

Pacic Hydro Clements Gap 57 Pacic Hydro

Inratil Energy Australia Angaston 50 Inratil all contracted to AGL Energy

Ratch Australia Starsh Hill 35 RATCH Austral iaContracted to Hydro Tasmania Tas Government

AGL Energy The Blu 33 Eurus EnergyContracted to AGL Energy

TASMANIA TOTAL CAPACITY 2 743

Hydro Tasmania Gordon; Poatina; Reece; John Butters; Tun-gatinah;Woolnorth;others

2 355 Hydro Tasmania Tas Government

Aurora Energy Tamar Valley Tamar Valley; Bell Bay 386 Aurora Energy Tas Government

Woolnorth Woolnorth 140 Shenhua Clean Energy 75%; Hydro Tasmania25%

ul p: cl; ; d; wid; dil/ul il/uli-ul; bi/b; upcid.

n: Cpci publid b aemo u 201213, xcp wid (id cpci).

suc: aemo; aer.

I su auli agL e i di t il cl ud 58 p c w


45/141


I su auli, agL e i di ,

wi 36 p c cpci. o iic ii

Iil Pw (18 p c), ali (12 p c),

oii e (10 p c), eauli d I

(9 p c c).

I nw su Wl, wd cpi w

ud 90 p c i cpci. I 2011

nw su Wl gv ld lcici di

i ud -id wd cpci

trU (bdd i 2012 eauli)

d oii e. llwi l, cl v

dipc wd pl i w pli bw

v ii mcqui gi (28 p c)

d Dl elcici (12 p c), d pivii eauli (16 p c) d oii e

(22 p c).

I spb 2012, nw su Wl gv

ucd cpi ud w udw

ppd pivii i ii wd

i . a i Vici, sw hd l

i i (15 p c).

I Quld, wd cpi swll d

Cs e cl ud 63 p c icpci, icludi pw puc v

pivl wd cpci (uc gld

pw i).

I ti, wd cpi w l ll

i cpci. t i il ccd,

wi hd ti wi 86 p c cpci.

t ti gv i 2012 ucd i wuld

bli ul cl v hd ti

wll civi (ci 1.5.4).

1.2.4 Vertical integration

Wil v ucull pd

uppl idu i 1990, d b

vicl -ii il d

il ucu. sci 5.2 il cp

dil vicl ii i nem. I u,

ldi ilagL e, oii e d

eauli, wic jil uppl 76 p c illcici cuicd i i

i 11 p c i 2007 35 p c i 2012.

t ic fc ciii oii e

ml pw i d agL e cquiii L

y a i Vici i 2012 ( pviul vi -id

ii i).

t il cl ud 58 p c w

i cpci ciid cid i

nem ic 2007. addiill, w il

vicll id wi xpl,

Iil Pw (sipl e), Iil (Lue), ali (nibud e) d sw hd

(rd e).

1.3 Ho the market operateg i nem ll lcici u wll

p i wic c i uppl d dd

di pic. t nem i pl, i ll

lcici l u ccu u p . a l , i p

cpci vilbili. t i cu il,

wic p lcici ud b i bui d

uld cu.

rid bid () i

pduc picul quii lcici viu

pic c v iu dipc pid i d.

a i bui c bid 10 di pic lvl

i ci. I u ld d c di d,bu c c i (bid) i, ubjc

bid bi i d i. I biddi, l

uppl quii c pic lvl, bu c l pic.

g cd b c, icludi

pl cl. Cl d , xpl, d

u i pl u cl cv i i -up

c, d lcici lw

iv pic u dipc.13 g pwd

c i pi c d ll uppl lcici l w pic i.

Biddi l b cd b uppl iu uc pl

u ci i ii w

lii p cpbilii. s v

pw i picul i d pidicll cpci

bv cpiiv pic, wi cpci u

b dipcd i il dd xcd ci lvl.

ti p bviu cl ccu i

p dd, ccpid b u w ci. m cl,

v pidicll ud ic biddi div iv

pic. t auli e rul (aer) i ii

i bviu ci w i i

pw iu.

13 t pic f qul $1000 p mW.

CHAPTER1

NE

M


46/141

41

NatioNal

lEctric

ity

MarKEt

t di wic dipcd, aemoc bid ll lw

i pic c v iu dipc pid.

I dipc cp bid ,

pivl xpiv uil u lcici

i dipcd dd. t i picd (

il ) dd dd dipc

pic. t wll p pic pid i

v dipc pic v 30 iu; ll

pid i pic, dl pic bid (bx 1.2).14

t llw p pic pd v i

uppldd blc. rii pic c il

dd id p d, i l , w

i iv.

sp pic bw f $1000 p mW

d cp $12 900 p mW (id $12 500 p

mW 1 Jul 2012). t cp i icd ull

fc c i cu pic idx. t auli

e m Cii (aemC) c u c

cp u i viw libili dd d

i (ci 1.9).

t p p pic c v

nem i. Pic pi i i ccu w l

lcl i uc c ic i dd

14 s bp i cl dipc pc, icludi ld wid , ccd ii w

( xpl, l p illi) d pduci xcluivl

i w u (uc ii pi).

i, w ci pv ibui i uppli ddiil lcici c ii

icc. a ll i, pic li c

i, xcp i pic dipii du picl

l i p lcici v l dic.

allwi ii l, pic c

ild i nem w lid bu

70 p c i i 201112, cpd wi

61 p c i 201011. Bu pid ili

p iic iu (ci 1.4).

1.4 Interreional tradet nem p ci u b llwi

lcici d v i, wic ii

icc li (u 1.3). td c libili

pw b llwi c i dw

wid pl v u. I

l llw i c i i ip lcici

lw c i. t cicl cpbilii c-bd icc upp lii iil

d. a i, w ci ci di lvl

blw il icc cpbilii.

iu 1.12 w di pii

v i:

Vici ubil lw c bld cpci,

i i xp lcici. I xp v

w dil ic 200809.

Box 1.2 Setting the spot price

iu 1.11 illu iplid bid c i nem

bw 4.00 d 4.30 p. iv icpci i i di pic . a

4.15 p dd lcici i bu 3500 mW. t

i dd, 1, 2 d 3 u b ull

dipcd d 4 i pl dipcd. t

dipc pic i $51 p mW. B 4.20 p, dd

i pi wic u b

dipcd. ti i c pic

$60 p mW, wic div up pic lvl.

a wll p pic i did c l

u pid (di ivl) d i v

v iu dipc pic dui ivl. I u

1.12, p pic i 4.004.30 ivl i bu

$54 p mW. ti i pic ll civ

i uppl dui i 30 iu pid, d

pic cu p i pid.

ire 1.11

generator bid tack

Megawatts

Documents

Australia energy Market 2012