Industry restructuring & policy
Industry restructuring and reform continues to provide valuable opportunities to improve economic efficiency and to benefit consumers. But the ongoing reform process presents considerable challenges for policy-makers and industry participants.
Successful and durable reform requires a well formed, clear objective and buy-in from key stakeholders. And while increasing competition, or improving regulatory incentives, can lead to welfare gains, this should not be at the expense of vulnerable or disadvantaged customers.
Frontier Economics has been an integral active participant in a number of major restructuring programs in Australia. Our skill is in seeing the source of economic problems, developing durable solutions, and anticipating implementation issues to ensure they do not undo valuable reforms.
We have depth of experience in industry reform:
- Consultants now at Frontier Economics were integral to the electricity reform process in QLD between 1996 and 1998, including overseeing integration of the QLD system into the NEM.
- We developed and implemented major energy reforms in New South Wales from 1999-2003, including the disaggregation of Pacific Power and implementation of full retail competition.
- From 2008 to 2010 we helped design and implement further reforms to help the New South Wales Government manage financial risks associated with its generation assets.
- In Western Australia between 1997 and 2004 we worked closely with the government on energy market designs suited to their circumstances, retail competition, industry structure, and market operation.
- From 2016 to 2018 we worked closely with the Government of South Australia to determine and implement its response to the 2016 blackout, including installation of the world’s largest battery, rapid development of a bank of gas turbines, and the world’s largest Virtual Power Plant for the benefit of public housing customers.
We also provide regular policy advice to governments on matters as diverse as monitoring of electricity, gas and liquid fuel markets, measures to promote energy security, policy support for rooftop PV and batteries, the role of hydrogen in our future energy mix, and the cost-benefit assessments of various policy or regulatory changes.