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www.eraa.com.au
About the Energy Retailers Association • Peak body representing electricity and gas retailers in
the national energy markets
• Members are mostly privately owned and vary in size
• Members are large, medium and niche retailers
• National coverage including WA
• Members have more than 10 million customers – more than 3 million gas customers
• Most customers are dual fuel though electricity is the predominant fuel
Our members
2007
Australian energy market reform
2002
1995
1994
1990-1
Industry Commission inquiry
National Competition Policy Review Committee - Hilmer
Competition Policy Agreements
Energy Markets Review - Parer
Energy Reform Implementation Group -
Scales
Privatisation commenced 1995
…led to energy market reforms
• Price Deregulation (Victoria and South Australia)• Australian Energy Market Commission• Australian Energy Regulator• Australian Energy Market Operator
• National Electricity Market• National Energy Customer
Framework (NECF)• National Competition Policy• Full Retail Contestability
The competitive framework in Australia
Generation market
Competitive market with few existing participants.
New entrants encouraged by governments' renewable energy and other policies.
Independently governed access arrangements to enable energy distributors to purchase supply on fair and equitable terms.
Distribution market
Natural monopoly market with several participants.
New entrants restricted by government policy.
Network tariffs regulated by government.
Retail market
Contestable market with multiple participants.
New/existing entrants encouraged by price signals, government policy and market conditions.
Customer service focus.
Consumer protection laws apply.
Retailers deliver CSOs like government funded rebates.
The current structure of the energy market
Regulatory situation
Consumer benefits of energy price deregulation include: – product innovation– improved customer service and responsiveness– option to shop around for better offers – save on the standing price
Jurisdiction Pathways to price deregulation
Victoria Price monitoring 1 January 2009
South Australia Price monitoring 1 February 2013
NSW Subject to AEMC reviewThree year price path set by IPART
Queensland One year price pathRecovery from tariff freeze
What does energy price deregulation look like?
• Price monitoring to local regulators– Victoria www.esc.vic.gov.au/ – South Australia www.escosa.sa.gov.au/
• Governments retain power to re-regulate
• Implementation of non-price consumer framework - NECF
Retailer market share
• Diagram from research undertaken by Deloitte Access Economics 2012
0%
20%
40%
60%
80%
100%
08/09 09/10 10/11 09/10 10/11 06/07 07/08 11/12
VIC NSW QLD
Top 3 New entrants
Diagram from research undertaken by Deloitte Access Economics 2012
Breakdown of a typical electricity bill
State of the Energy Market 2012
Electricity demand is falling
• Solar PV penetration • Decentralised generation • Solar hot water • Energy efficiency • Price elasticity of demand • Commercial and industrial load
Solar PV penetration
Smart meters – peak demand
ERAA released five smart meter working papers examining key policy discussions:
1. The benefits of smart meters2. Enabling a market-driven smart meter rollout3. Competitive neutrality4. Privacy of personal information5. Third party and distributor framework