The Australian Energy Council (AEC) published a report prepared by Frontier Economics consultant, Rajat Sood, on the impact of a range of changes to electricity technology, market architecture and supporting infrastructure on the structure and competitiveness of the NEM.

The report found that these developments are likely to:

  • Help smooth wholesale price volatility in both the short term and in the medium to longer term
  • Reduce the advantages of the vertically-integrated ‘gentailer’ business model and
  • Encourage more competitive behaviour in the NEM wholesale market, leading to more efficient and cost-reflective dispatch and pricing outcomes.

Accordingly, these changes should address many of the concerns that have recently been raised by policy-makers and regulators about competition in the wholesale market and hence avoid the need for the policy and regulatory changes presently being considered.

The report is available on the AEC website.

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