"The ACCC report is a huge contribution that will take time to digest and we will consult our members, particularly industrial energy users, in making a fuller assessment. However, the ACCC has offered many tools to help get electricity prices down and our first impression is a positive one.
"Some options are already familiar:
- It is welcome to see the ACCC endorse reforms such as allowing energy users to sell their demand response straight into the wholesale electricity market, as Ai Group has long called for.
- A voluntary write-down of the value of State-owned electricity networks makes a lot of sense, though the fiscal consequences will need careful management.
- Splitting Queensland's publicly owned generation into three independent portfolios would help reverse the concentration of the generation sector.
- The ACCC endorses the National Energy Guarantee as an effective framework for addressing energy and climate policy, which we welcome.
Some options are new and will need a lot of work to understand and flesh out:
- The proposal to prevent generators' regional market share from growing beyond 20% is nuanced, providing a significant constraint on buy-outs of competitors without requiring breakups or preventing the construction of new assets. Further work is needed to assess the risk of unintended consequences.
- Government-backed long-term offtake agreements for qualifying new generation could help bring forth more projects like the recent agreement between a consortium of South Australian energy users and GFG Alliance. But long-term commitments could also expose taxpayers to significant financial risks, and cut across other elements of energy market design and policy. Care and consultation are needed to ensure the offtake proposal delivers value.
We commend the ACCC for putting the interests of energy users front and centre in the debate, and look forward to working with our members to ensure those interests are advanced by the ACCC's recommendations," Mr Willox said.
Media enquiries: Tony Melville – 0419 190 347