AEMO Energy Markets
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Since the early- to mid-1990s, energy supply deregulation and privatisation of some state-owned assets has led to the establishment of increasingly open and transparent trading markets, facilitating trading and the competitive supply of gas and electricity.
Since 1998 the generation, distribution and supply of electricity in eastern and southern Australia has been conducted under the framework of the National Electricity Market (NEM).
Privatisation and disaggregation of the state-owned Gas and Fuel Corporation led to the establishment of a gas spot market in Victoria in March 1999.
The adoption of retail competition also led all jurisdictions in eastern and southern Australia to introduce gas and electricity retail market arrangements in the early 2000s.
When they commenced, retail gas markets were jurisdictionally based, so until AEMO’s establishment in 2009, there existed the National Electricity Market Management Company (NEMMCO) and the following energy market management and planning entities:
- The Electricity Supply Industry Planning Council (ESIPC, South Australia).
- The Victorian Energy Networks Corporation (VENCorp, Victoria).
- The Retail Energy Market Company (REMCO, South Australia and Western Australia).
- The Gas Market Company (GMC, New South Wales/ACT).
- The Gas Retail Market Operator (GRMO, Queensland).
Gas pipeline investment in the early 2000s also led to the establishment of an interconnected gas grid connecting all eastern and southern states of Australia. This, together with the increasing integration of gas and electricity markets, led to the establishment in 2009 of a single operator, AEMO, to oversee and further integrate infrastructure planning and trading activities across different energy transmission systems.
With AEMO’s establishment in 2009 and commencement of the gas Short Term Trading Market at the Sydney and Adelaide hubs in 2010 (and Brisbane in 2011), Australia became one of the first countries in the world to establish highly competitive and transparent gas and electricity markets, underpinned by a common governance structure.
Market operations can now evolve based on a consistent framework of operational rules and underlying systems that ensure maximum efficiency and integrity, and better energy resource development.