❓ The Minister for Energy provides an update on the electricity market review, focusing on the transition of market operations and systems management to the Australian Energy Market Operator (AEMO) to reduce costs and improve efficiency.
AnsweredQoN 837Legislative Assembly
QuestionView source ↗
ELECTRICITY MARKET REVIEW
837. Mr S.K. L'ESTRANGE to the Minister for Energy:
Will the minister please update the
house on the electricity market review, particularly the transition to the
national market operator?
837. Mr S.K. L'ESTRANGE to the Minister for Energy:
Will the minister please update the
house on the electricity market review, particularly the transition to the
national market operator?
AnswerView source ↗
I thank the member for the question
and for his interest in electricity reform generally. It will be remembered
that a year or so ago we published the Breslin report that recommended a whole
range of changes, and one of them was to make sense of the way we regulate both
the wholesale market and the systems operator. It no longer made sense to have
the Independent Market Operator operating the electricity market and then
Western Power operating the systems, so it was recommended to bring those two
together. The report also recommended some other changes, in particular two
major ones. One recommendation was that the rule making by which the market
operates be taken away from the operator—separate operations and
policymaking—and it was also suggested strongly that we consider having
the operations undertaken by the Australian Energy Market Operator, which does
the eastern states grid. The reason that was suggested was that it would do it
at a much lower cost, particularly when we move to full retail contestability.
If we did not do that, it would require the IMO to invest tens of millions of
dollars into new computer facilities to operate the retail market. I asked a
steering committee to look at this and it recommended it, and it has widespread
support from industry participants, so we are in the process of doing it; that
is, the Australian Energy Market Operator will take over the IMO activities,
the market operations and systems management, along with its gas operations—the
Gas Bulletin Board and the ''Gas Statement of Opportunities''.
Mr M. McGowan interjected.
The SPEAKER :
Leader of the Opposition!
Dr M.D. NAHAN : The rule-making operations, the policy, will remain in Perth, probably
in the Economic Regulation Authority. The AEMO will set up an office and assume
the staff of the IMO, except for the CEO, who will be a new person. All staff
have been informed that their contracts will be continued as is and they will
operate the market. The market will not change; it will remain a capacity
market. The rule-making operations will be here. This operation will save
significant money. I might add that the IMO is not funded by the state; it is
funded by the market operators, which are strongly for this because it will
lower the cost, particularly as we go to full retail contestability, and it
will also allow us to learn from the research undertaken across the nation on
how to deal with the revolution of solar cells. This is a major step of reform
driving efficiencies, using the best information available, linking with the
eastern states and developing an office of the AEMO here. This is what we have
to do in the future: make sense of the mess of the electricity system we
inherited.
and for his interest in electricity reform generally. It will be remembered
that a year or so ago we published the Breslin report that recommended a whole
range of changes, and one of them was to make sense of the way we regulate both
the wholesale market and the systems operator. It no longer made sense to have
the Independent Market Operator operating the electricity market and then
Western Power operating the systems, so it was recommended to bring those two
together. The report also recommended some other changes, in particular two
major ones. One recommendation was that the rule making by which the market
operates be taken away from the operator—separate operations and
policymaking—and it was also suggested strongly that we consider having
the operations undertaken by the Australian Energy Market Operator, which does
the eastern states grid. The reason that was suggested was that it would do it
at a much lower cost, particularly when we move to full retail contestability.
If we did not do that, it would require the IMO to invest tens of millions of
dollars into new computer facilities to operate the retail market. I asked a
steering committee to look at this and it recommended it, and it has widespread
support from industry participants, so we are in the process of doing it; that
is, the Australian Energy Market Operator will take over the IMO activities,
the market operations and systems management, along with its gas operations—the
Gas Bulletin Board and the ''Gas Statement of Opportunities''.
Mr M. McGowan interjected.
The SPEAKER :
Leader of the Opposition!
Dr M.D. NAHAN : The rule-making operations, the policy, will remain in Perth, probably
in the Economic Regulation Authority. The AEMO will set up an office and assume
the staff of the IMO, except for the CEO, who will be a new person. All staff
have been informed that their contracts will be continued as is and they will
operate the market. The market will not change; it will remain a capacity
market. The rule-making operations will be here. This operation will save
significant money. I might add that the IMO is not funded by the state; it is
funded by the market operators, which are strongly for this because it will
lower the cost, particularly as we go to full retail contestability, and it
will also allow us to learn from the research undertaken across the nation on
how to deal with the revolution of solar cells. This is a major step of reform
driving efficiencies, using the best information available, linking with the
eastern states and developing an office of the AEMO here. This is what we have
to do in the future: make sense of the mess of the electricity system we
inherited.
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