The Australian Energy Regulator (AER) has today published a Wholesale Market Monitoring and Reporting Draft Guideline and accompanying Explanatory Statement and is seeking feedback from stakeholders.
The Draft Guideline follows the South Australian Parliament passing new legislation to expand the AER’s wholesale market monitoring and reporting functions, to include wholesale gas markets and electricity and gas contract markets.
The Draft Guideline sets out the general approach the AER will take toward fulfilling our enhanced functions.
The accompanying Explanatory Statement provides further information on several key issues raised by stakeholders during consultation on an Issues Paper released earlier this year.
Having access to contracts and related information will provide the AER with visibility of the underlying drivers influencing how and why market participants behave the way they do. It will help us to assess whether the outcomes in wholesale markets reflect effective competition in those markets, and whether wholesale markets are operating efficiently. It will also provide valuable insight for understanding how retail markets are impacted by wholesale markets.
Our improved market understanding and insights will be used to expand and enhance our existing suite of reports, providing timely and transparent information to market participants, policy makers and consumers throughout and beyond the energy transition.
An online forum to discuss the Draft Guideline will be held at 11am AEST on 17 July 2024, with submissions due by 7 August 2024.
Background
One of the AER’s key functions is to monitor and report on the performance of wholesale markets.
We deliver our function by reporting on the performance of wholesale markets via a range of public reports that provide timely information underpinned by expert and transparent analysis.
Our regular reporting exists to provide confidence in our energy systems, supports efficient decision making by market participants, and well-informed decision making by policy makers.
To date, we have relied primarily on public information to assess the performance of wholesale energy markets. This information provides us with an understanding of market participants’ conduct within, and outcomes of, the markets. However, publicly available information provides very limited visibility of market participants’ contracting behaviour.
Through the collection and monitoring of contract related information we will build a more holistic well-formed view of wholesale energy markets which will significantly improve our capability to evaluate performance, competition and efficiency in these markets.