The Australian Energy Market Operator (AEMO) has today officially taken responsibility as the wholesale and retail market operator in Western Australia.
As announced by WA Treasurer and Energy Minister Dr. Mike Nahan at the end of September, AEMO will also have responsibility for the WA Gas Bulletin Board and Gas Statement of Opportunities, and during 2016 will take responsibility for power system operations from Western Power, establishing AEMO as the independent system operator for WA.
While the Wholesale Electricity Market (WEM) and the National Electricity Market (NEM) differ in their market design, they do share some common familiarities and challenges, and ultimately, they share the same objectives.
“Today represents a significant step forward to creating a national energy market and to establish the right model that achieves the market objectives of reliability and efficiency in investment and operation,” AEMO Managing Director and CEO, Matt Zema said.
“We believe there are a number of benefits to be realised by energy market consumers and participants with the potential for common interfaces to be available to participants and investors in the Wholesale Electricity Market (WEM) and the National Electricity Market (NEM).
“Equally, we recognise there are unique features of the WA market and we will continue to operate market arrangements and systems tailored to WA needs for the foreseeable future,” Mr Zema said.
AEMO envisages synergies to emerge from leveraging across the energy markets, such as:
- Productivity gains from combining best practices, knowledge and experience, planning methodologies, systems for implementation and monitoring.
- Providing a holistic, system-wide, integrated approach, considering implications of national policies. A transparent, and total lower cost approach to IT systems.
- Providing a central point of information for investors and market participants.
- Facilitating investment by providing confidence in the design and operation of the market for investors and consumers.
“AEMO looks forward to playing a role in the retail market services, and system and market operation arrangements, supporting the activities of the government’s reform process for the benefit of all stakeholders,” Mr Zema said.
AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems, including the National Electricity Market and interconnected power system in Australia’s eastern and south-eastern seaboard, and the Wholesale Electricity Market and power system in Western Australia.
AEMO also operates the Victorian Declared Wholesale Gas Market and the Victorian gas transmission system; the wholesale gas Short Term Trading Market hubs in Adelaide, Sydney and Brisbane; the Wallumbilla Gas Supply Hub in Queensland.
As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems security advice and services to deliver energy security for all Australians. For more information, head to www.aemo.com.au.
COMPARING THE NATIONAL ELECTRICITY MARKET WITH THE WESTERN ELECTRICITY MARKET
The NEM commenced operation as a wholesale spot market for electricity in December 1998 and incorporates around 40,000 km of transmission lines and cables.
The NEM supplies about 200 terawatt hours of electricity to businesses and households each year, with $7.7 billion traded in the NEM in 2014–15. The NEM supplies around 9 million customers and has a total generating capacity of approximately 51,000MW.
By comparison, the WEM commenced operation in September 2006, with the South West Interconnected System (SWIS) spanning over 7,802 km of transmission lines.
A total of $500 million was transacted in 2014-15. There are more than 1 million customers in the WEM and has a total generating capacity of 5,788 MW – including 513 MW of non-scheduled generation.