On 9 September 2015, the Economic Regulation Authority (ERA) published its 2014 Wholesale Electricity Market (WEM) report. This report was originally sent to the Minister for Energy on 3 March and tabled in Parliament on 8 September 2015.
The ERA’s key observations in the report related to:
- Industry structure – currently dominated by Synergy which restricts the entry of and any expansion by other retailers.
- Market governance – government ownership and intervention in the market represents a conflict of interest.
- Reserve Capacity Mechanism – has resulted in excess market capacity and a single ‘price’ for all types of capacity.
- Unconstrained network access – may not result in the most economically efficient development of the network and a move to constrained access is recommended.
The ERA notes that the current Energy Market Review considers some of the major issues identified in previous reports and so has not duplicated that work. Consequently, the 2014 WEM Report focussed on operational matters affecting the market which can be resolved within the current approval processes.