The ERA began our first review of the Wholesale Electricity Market in 2007, a little under a year after the Market came into operation. We reviewed a range of market data and analysis provided by the Independent Market Operator.
The ERA noted that:
- Since the Wholesale Electricity Market commenced, new participants had entered the market, which was expected to reduce the share of capacity iprovided by Verve Energy from around 90 per cent to around 60 per cent over the years to 2009/10.
- Despite Verve Energy accounting for the overwhelming majority of capacity, other Market Participants had been active in the short term energy market since commencement of the Wholesale Electricity Market.
- With the entry of new generation facilities operated by Market Participants other than Verve Energy over the next few years, there was expected to be a broader range of Market Participants scheduling bilateral quantities and participating in the short term energy market.
- Outcomes indicated that prices tended to decline and become less volatile in both the short term and balancing markets.
- Outcomes indicated that prices in the short term and balancing markets had provided useful signals to Market Participants, with prices responding to scarcity in the market.
The 2007 review also included the first triennial review of whether the Market was achieving the objectives set out in the Electricity Industry Act 2004.
Our discussion paper was published in August 2007 and we received 12 submissions from the public. Our report was delivered to the Minister for Energy where it was tabled in Parliament on 19 March 2008.