We would all like to believe that we are working towards developing a genuinely national strategy to transition to a cleaner energy environment. The Australian Energy Market Commission (AEMC) report on the wholesale gas market released recently provides some useful recommendations to increase the trade and transportation of gas on the east coast.
The highlights are:
- Development of two primary trading hubs (which both already exist but need some work to improve their trading capabilities) one at Wallumbilla and one at the Victorian Declared Wholesale Gas Market;
- Development and introduction of capacity auctions for any contracted but un nominated pipeline capacity and hub services, standardisation of key contractual terms for pipeline and hub services to apply across the east coast market and the creation of capacity trading platforms, including electronic, anonymous, exchange based trading; and
- COAG Energy Council to establish a dedicated Gas Reform Group to develop the package of changes required and give AEMC a rule making power to regulate pipeline capacity trading.
If we are going to get anywhere near a genuinely national strategy, the COAG Energy Council needs to carefully consider not only the AEMC recommendations but also the other recent reports into the east coast gas market and come up with some sensible policy reform.