RESEARCH PAPER SERIES, 2017–18              18 December 2017

Energy resources: a quick guide

Adrian Makeham-Kirchner

Economics

Energy has become a major electoral and economic issue in Australia. To understand the complexity of the domestic energy market—electricity and gas—requires access to a wide array of information. As the issue is managed by both Commonwealth and state bodies, the information can be disparate and difficult to access simply. This quick guide provides a list of key Australian sources, and some high level international resources, that assist in understanding the Australian energy market.

This guide does not outline parliamentary resources, such as chamber records or committee inquiries.

Australian Government resources

The Department of Environment and Energy (DEE) provides two key points of entry on energy, and some benchmark statistical publications:

•        The energy topic page provides links to information on Australian Government programs and general market overviews.

•        The recently launched energy.gov.au website is a collaboration between the DEE and other agencies. This source provides contemporary energy policy details, including an overview of the recent ‘A better energy future for Australia’, which addresses the National Energy Guarantee.

•        An ‘authoritative and official source of energy data for Australia’ called Australian Energy Statistics includes reports and time series data that can be downloaded.

•        The DEE’s monthly publication, Australian Petroleum Statistics, provides ‘national and state statistical information on sales of petroleum products, exports and imports of petroleum products and crude oil, production of crude oil and condensate, refinery input and output, and stocks of petroleum products’.

•        A range of data is available under ‘Tracking Australia’s greenhouse gas emissions’, including a quarterly update on Australia’s greenhouse inventory, state and territory greenhouse gas inventories, economic sector inventories, greenhouse factors for industry and greenhouse fact sheets.

•        The Department of Industry, Innovation and Science provides information on Australian industry, including the mining and resources sectors. There are a number of key resources, including:

•        information relating to the management of ‘upstream petroleum’, which ‘includes all petroleum exploration and extraction activities … which take place prior to the shipment of stabilised crude oil, condensate or sales gas’ (including LNG). Key among the activities are the management of offshore petroleum development through:

–      the National Offshore Petroleum Titles Administrator and

–      the National Offshore Petroleum Safety and Environmental Management Authority and

•        economic analysis through the Office of the Chief Economist, especially the industry level publications:

–      Resources and Energy Quarterly, which covers global and local production and consumption details, and forecasts in Australia’s key commodities

–      the Gas Market Report, which covers local and international gas markets and

–      a series of informative publications that are one-off or semi-regular, such as Resources and Energy Major Projects, Electricity Generation Major Projects, End-Use Energy Intensity in Australia and Australian Energy Projections to 2049–50.

Geoscience Australia (GA) is the key government body responsible for Australian Government scientific research and advice on geology and geography in Australia. Its website includes a range of resources and tools relating to energy. Valuable insight into the future of the energy market can be found under the current and concluded projects lists. There are a number of useful GA publications:

•        Australia’s non-renewable and renewable energy resources and their distribution are described in Australian Energy Resource Assessment, in particular the discussion about gas. The publication also covers oil, coal and other major resources groups.

•        The Australian Renewable Energy Mapping Infrastructure data platform helps parties to renewable transactions to evaluate spatial renewable energy information.

•        An assessment of Australia’s petroleum resources is set out in Oil and Gas Resources of Australia (2005 to 2010), and of Australia’s coal and uranium (and other minerals) in Australia’s Identified Mineral Resources (2016; with simplified but more dated commentary available online).

The Australian Competition and Consumer Commission (ACCC) provides services in relation to ‘regulated infrastructure’, in addition to consumer protection and competition regulation. The Australian Energy Regulator (AER) is the primary regulatory body.; However, AER staffing, resources and facilities are provided by the ACCC. The ACCC maintains a regulatory function in energy by enforcing competition and consumer protection provisions in energy markets and assessing energy mergers and authorisations. Between 2015 and 2017 the ACCC was called on by the Australian Government to make inquiries into the supply and demand for gas, electricity supply and prices and the competitiveness of the East Coast wholesale gas market.

The Department of the Prime Minister and Cabinet (PM&C) holds some policy coordination functions. In particular, it has a domestic policy focus on supporting cross-government efforts relating to climate change, energy productivity and the environment, including the Paris Climate Change Agreement and the National Energy Productivity Plan. In addition, PM&C hosts the Infrastructure and Project Financing Agency, which provides advice on funding and financing nationally significant infrastructure, including in the energy sector.

The Clean Energy Finance Corporation is a statutory authority established by the Australian Government to provide specialist clean energy finance, in order to increase the flow of finance into renewable energy, energy efficiency and low emissions technologies.

The Clean Energy Regulator administers schemes legislated by the Australian Government for measuring, managing, reducing or offsetting Australia's carbon emissions. This includes the National Greenhouse and Energy Reporting Scheme, Emissions Reduction Fund, Renewable Energy Target and the Australian National Registry of Emissions Units.

The Australian Renewable Energy Agency aims to accelerate Australia’s shift to renewable energy by funding projects and sharing knowledge to assist in commercialising renewable energy technologies.

The Department of Infrastructure and Regional Development (DIRD) does not have a defined role in energy generally, but has a range of functions in infrastructure planning, transport, roads, rail, maritime and regional policy that may influence the effectiveness of energy infrastructure. More immediately relevant is that within DIRD the Bureau of Infrastructure, Transport and Regional Economics (BITRE) publishes an Infrastructure statistics yearbook, which contains essential infrastructure data on the energy sector, among others.

From time to time the Productivity Commission (PC) undertakes inquiries and research into aspects of the energy market. For example, its Shifting the Dial: 5 year productivity review report included a chapter on improving the efficiency of markets, including the energy sector; and in 2015 the PC delivered a research paper on Examining Barriers to More Efficient Gas Markets.

National resources

The Council of Australian Governments (COAG) Energy Council governs overall energy market matters. The Energy Council is a ‘Ministerial forum for the Commonwealth, states and territories and New Zealand, to work together in the pursuit of national energy reforms’. The website is updated regularly and provides links to the terms of reference, meeting details and communiques, priorities, projects and publications. In the context of the National Energy Guarantee discussion, this is also the location of the Energy Security Board.

The Australian Energy Market Commission (AEMC) provides market development advice to government and makes rules for Australian electricity and gas markets, including the National Electricity Rules, National Gas Rules and National Energy Retail Rules. These rules are made under the National Electricity Law, the National Gas Law and the National Energy Retail Law. Each year the AEMC publishes comprehensive details about retail electricity price performance in the National Electricity Market (NEM), the most recent being the 2016 Residential Electricity Price Trends report.

The Australian Energy Regulator (AER) regulates energy markets and networks under the national energy market legislation and rules. This includes monitoring wholesale markets to ensure industry compliance, taking enforcement actions, setting revenues that network businesses can recover from networks, and regulating retail energy markets in Queensland, New South Wales (NSW), South Australia (SA), Tasmania (electricity only) and the Australian Capital Territory (ACT). A benchmark publication on the energy market, State of the Energy Market, is released regularly by AER, and there are frequent update reports on parts of the market.

The Australian Energy Market Operator (AEMO) is responsible for the operations of the National Electricity Market, the interconnected power system in Australia’s eastern and south-eastern seaboard, parts of the Western Australian (WA) wholesale electricity network and a number of components of the gas market across Australia. AEMO produced a simplified fact sheet of the operation of the NEM. The following table outlines the coverage of AEMO in each of the states and territories by energy type and market function.[1]

Electricity

Gas

NSW and ACT

National Electricity Market

Natural Gas Services Bulletin Board

Short Term Trading Market

Gas Retail Markets

Victoria

National Electricity Market

Natural Gas Services Bulletin Board

Declared Wholesale Gas Market

Gas Retail Markets

SA

National Electricity Market

Natural Gas Services Bulletin Board

Short Term Trading Market

Gas Supply Hubs

Gas Retail Markets

Tasmania

National Electricity Market

Natural Gas Services Bulletin Board

Queensland

National Electricity Market

Natural Gas Services Bulletin Board

Short Term Trading Market

Gas Supply Hubs

Gas Retail Markets

WA

Wholesale Electricity Market in the South West Interconnected System

WA Gas Bulletin Board

Gas Retail Markets

WA and Northern Territory (NT) based resources are outlined under ‘State and territory government resources’ below.

AEMO is a source of real-time and detailed wholesale pricing data in each of the markets it operates. This includes:

•        the NEM Data Dashboard, which provides high level within-day price and volume data, average price tables, operational demand files, a seven-day outlook and a medium-term outlook

•        a visual interpretation of instantaneous dispatch within the NEM, which is a useful reference to understand market dynamics (there is also a private sector live infographic of daily generation information called NEM Watch, which utilises AEMO dispatch data) and

•        details on:

–      the Wholesale Electricity Market in WA, including a data dashboard

–      the Declared Wholesale Gas Market, including a data dashboard

–      the Short Term Trading Markets, including a data dashboard and

–      Gas Supply Hubs, including a data dashboard.

These are not all the data or reporting undertaken by the AEMO, but they do provide a reasonable overview of what is happening in the AEMO-covered operations at any one time.

Within the NEM, customers can use an energy price comparison tool, Energy Made Easy, to assist with provider selection. This tool is operated by the AER.

The Australian and state and territory governments have created a joint initiative called the Energy Exchange, which supports the development and implementation of energy management and energy efficiency strategies by providing a centralised source of information targeted at business and commercial users.

State and territory government resources

Generally, all state and territory governments participate in the Energy Council, as well as operating local energy market policies and programs. Several states have project work operating out of their central agencies. This section lists energy market resources at the state and territory level covering, primarily, policy and regulatory functions.

New South Wales

The NSW Department of Planning and Environment manages resources and energy policy. The Department provides advice to energy consumers and the energy supply industry. Consumer information covers reducing power bills, consumer protection matters and NSW solar scheme and metering matters. Supply industry resources are targeted at outlining the industry segments, accreditations for contestable works, innovation frameworks and NSW renewable energy matters.

NSW also has an Independent Pricing and Regulatory Tribunal (IPART). IPART states that it provides independent regulatory decisions and advice to protect the ongoing interests of the consumers, taxpayers and citizens of NSW. In energy, IPART monitors and reports on the performance and competitiveness of the retail electricity and gas markets in NSW; provides guidance on solar feed-in tariffs; and administers the licences, safety and reliability of transmission and distribution networks in NSW. It also conducts reviews into aspects of electricity supply at the request of the NSW Government.

Victoria

The Department of Environment, Land, Water and Planning manages energy policy. This includes managing Victoria’s renewable energy targets; and consumer details like energy affordability, saving on costs and finding a distributor. In addition it advises on power outages and emergencies.

The Essential Services Commission (ESC) ‘aims to promote the long term interests of Victorian consumers with respect to the price, quality and reliability of essential services’. In relation to energy, it licenses all businesses involved in the supply of electricity and gas in Victoria and regulates the retail sale of energy (not prices) and the consumer service standards for energy distribution. The ESC also administers the Victorian Energy Efficiency Target, and publishes the Victorian Energy Market Report.

The Victorian Government also operates an independent website, Victorian Energy Saver, to assist consumers’ understanding of the energy market.

South Australia

The single entry SA Government portal provides links to SA energy and environment policy. This includes consumer information, industry information, and other environmental matters. SA electricity and gas supply matters are summarised on this site.

The 2017 announcements of SA energy market investments are mostly contained in the Our Energy Plan document and website. These resources summarise the SA approach to battery storage, state-owned gas power plants, local power over the national market, independent energy contracting, SA gas incentives and the SA energy security target.

The Essential Services Commission of South Australia (ESCOSA) is an independent economic regulator, the objective of which is the ‘protection of the long term interests of South Australian consumers with respect to the price, quality and reliability of essential services’. ESCOSA outlines its functions under electricity and gas segments. ESCOSA functions include the regulation of feed-in tariffs; advice on retail prices; administration of energy efficiency schemes; and licencing, performance monitoring and reporting on generation (electricity), transmission, distribution and off-grid suppliers in SA.

Tasmania

The Department of State Growth (DSG) is responsible for energy policy in addition to a range of functions like investment attraction, transport, infrastructure and tourism. In energy and resources, DSG works with the forestry, energy, mining and minerals sectors to achieve growth. In energy, DSG provides policy advice in areas such as energy markets, regulation, legislation and energy security. This includes the Tasmanian Energy Security Taskforce and the Tasmanian Energy Strategy

The Office of the Tasmanian Economic Regulator (OTTER) is an independent regulator that aims to protect the long term interests of consumers with respect to the price, quality and reliability of services by regulating a number of monopoly, near-monopoly and specified industries within Tasmania, such as electricity, gas, water and sewerage, taxis and compulsory third party insurance. In electricity, OTTER regulates security and reliability of the electricity system, the quality of electricity supplied, and the prices and conditions of the supply of electricity and related services. OTTER achieves this by setting a maximum retail price, administering licences, regulating technical standards, and implementing requirements under Tasmania’s regulatory framework. In gas, OTTER has similar functions, embedded in laws and regulations, to administer licences, regulate technical standards and codes, report on the state of the industry and grant gas distribution, retail and pipeline licences.

Queensland

The Department of Energy and Water Supply is responsible for energy policy with the aim of reducing cost of living pressures in Queensland through innovative and efficient energy and water supply services. The functions are separated for electricity and renewables and gas. The Department provides information about a range of issues including Queensland’s renewable energy policy, affordable energy, rebates and concessions, prices, supply issues, regulation and safety.

The Queensland Competition Authority (QCA) is an independent regulator that aims to ensure ‘monopoly businesses operating in Queensland, particularly in the provision of key infrastructure, do not abuse their market power through unfair pricing or restrictive access arrangements.’ In electricity regulation, the QCA has dual functions. First, it provides typical consumer protection functions on prices, solar feed-in tariffs and related matters. Second, the QCA determines electricity prices for consumers who are outside of the de-regulated south east Queensland market, because ‘competition is limited in the rest of Queensland and most regional and rural consumers continue to be supplied by Ergon Energy under a standard contract. This is because Ergon Energy receives a subsidy to ensure that consumers in higher-cost regional and rural areas pay the same regulated prices as consumers in lower-cost south east Queensland’. The regulated regional pricing decisions are published by the QCA.

Western Australia

WA does not participate in the NEM. Some functions are coordinated through national market bodies; however, the system is different to that in NEM states. It is useful to understand that the WA market is different to other Australian markets because:

•        WA is generally split into the ‘South West Interconnected System of Western Australia (SWIS)’ and non SWIS zones, which determines how market operations and regulations work

•        the WA Wholesale Electricity Market (WEM) and power system for the SWIS and the retail gas market in WA are administered by the AEMO and

•        the WA Government sets prices for retail electricity for some consumers in some parts of WA, regulates gas prices for some consumers, and owns a number of enterprises that generate, distribute and retail energy in WA.

Policy information is diffuse among WA Government agencies. The Department of Mines, Industry Regulation and Safety includes EnergySafety, which is responsible for the technical and safety regulation of all the electrical and most of the gas industry in WA, mostly applying to workers in those sectors. The WA Department of Treasury contains a Public Utilities Office (PUO), the website which includes resources on sector reforms, an overview of the WA electricity industry, gas industry and electricity pricing as well as details about solar policy. The PUO also coordinates energy industry reforms.

The Energy Disputes Arbitrator provides a dispute resolution service between users, or prospective users, and providers of gas pipeline services and other parties seeking access to regulated gas pipelines. The Electricity Review Board can adjudicate some appeals, such as those against decisions of the WA Economic Regulation Authority (ERA) or WA energy minister; and make determinations about decisions in the WEM environment.

The WA Economic Regulation Authority (ERA) is an independent body that aims to ensure fair, competitive and efficient outcomes from regulated monopoly businesses for consumers and businesses. It has separate functions for electricity and gas. In electricity, the ERA approves access arrangements for network assets, administers the licensing regime for all parts of the supply chain, and monitors the behaviour of participants in the wholesale market. In gas, it regulates access arrangements, administers the licensing regime across the supply chain and oversees the gas retail market scheme. Finally, the ERA has recently established the WA Rule Change Panel, which was set up under WA regulations to deal with decision-making functions for changes to the WEM Rules and the Gas Services Information Rules, in a similar way that the AEMC assesses rules under the NEM.

The ERA does not set energy prices in WA. Electricity prices are determined by the WA Government annually as part of the State Budget process. The WA Government also regulates natural gas prices for small customers in certain areas.

It is notable that:

•        Horizon Power is a government-owned enterprise that generates, distributes and retails electricity outside of the SWIS, covering areas such as the Pilbara, Kimberley, Gascoyne, Mid-West and the southern region of WA that includes the Southern Goldfields, Esperance, Hopetoun and Norseman

•        Western Power is a government-owned enterprise that provides transmission and distribution services to WA and

•        Synergy Energy is a government-owned enterprise that generates and sells electricity (and gas) to the SWIS. It also offers wholesale services under certain conditions.

Australian Capital Territory

The Environment, Planning and Sustainable Development Directorate (EPSDD) is responsible for energy policy in the ACT. The main areas of focus are ‘reliable and affordable energy’, ‘smarter use of energy’, ‘cleaner energy’ and ‘growth in the clean economy’. It addresses these through programs that invest in renewable energy sources and efficiency programs like ‘Actsmart’. EPSDD is also the Technical Regulator of utilities services in the ACT, the role of which is to ‘ensure safe and reliable gas, electricity and water services to the community’.

The Independent Competition and Regulatory Commission (ICRC) regulates prices, access to infrastructure services and matters in relation to regulated industries; and investigates competitive neutrality complaints and government-regulated activities. In relation to energy, the ICRC licenses distributors, monitors compliance with licence conditions and regulatory obligations, and determines a range of matters such as industry codes, regulatory cost recovery under an ‘energy industry levy’ and (when requested) electricity prices in their coverage area.

Northern Territory

The NT does not participate in the NEM market functions. It does utilise the AER for aspects of network regulation. However, there are slightly different resources for the NT energy sector.

Primary policy functions for energy sit with the Department of Primary Industries and Resources (DPIR). The DPIR states that it brings together key functions that drive economic development on NT lands, coastal areas and waterways, with a focus on livestock, horticulture, fisheries, mining and energy. There is no single point on energy, but the resources cover a range of geoscience and mining functions, and include publications, information and statistics on mining and energy. In addition, the Department of Treasury and Finance provides resources on utilities reform, covering significant reforms to electricity markets and assets.

The Utilities Commission (UC) is an independent industry regulator, established to oversee regulated industries for the ‘promotion and safeguard of competition and fair and efficient market conduct or, in the absence of a competitive market, the simulation of competitive market conduct and the prevention of the misuse of monopoly power’. In electricity, the UC covers market administration, conduct performance, pricing and technical regulation. This covers issues such as licensing; disputes and compliance monitoring; approval and/or enforcement of codes and rules aimed at ensuring appropriate behaviour and conduct by licensed or regulated entities; service levels and performance indicators across the supply chain; and enforcing technical regulations. Pricing regulation is most complicated as the UC creates regulated prices for retail customers consuming less than 750 megawatt hours per year, monitors ‘power system control and ancillary charges’ and provides some regulation of generation pricing (in particular ‘prices oversight of Power and Water Corporation’s generation business by the Commission for as long as that business is not subject to competition or the tangible threat of competition’).

It is notable that:

•        the NT Power and Water Corporation is a government-owned enterprise that is responsible for electricity transmission and distribution across the NT, and operates a small retail business

•        Territory Generation is a government-owned enterprise that produces electricity for the NT and

•        Jacana Energy is a government-owned entity that is one of the retailers of electricity in the NT.

National groups and bodies

There are a number of bodies that have a primary focus on energy, representing various parts of the market from generation to consumption. Some of the larger national bodies are described below. Other bodies may exist at a state level, and some groups talk about energy without a primary energy market focus. Those groups are not outlined below, nor are suppliers and participants in the market.

Energy Consumers Australia (ECA) is a consumer advocacy group created by COAG that works to promote the long-term interests of residential and small business energy consumers with respect to price, quality, safety, reliability and security. The ECA provides a useful summary of survey data on small and medium enterprise retail tariffs, the most recent for October 2017.

Energy Networks Australia (ENA) is the national industry association representing Australian electricity networks and gas distribution businesses. ENA states that it has 25 electricity and gas network companies as members and that it provides ‘governments, policy-makers and the community with a single point of reference for major energy network issues in Australia’. ENA makes available a range of publications including submissions, briefings, fact sheets and industry guidelines. It is also collaborating with the CSIRO to implement an Electricity Network Transformation Roadmap.

The Australian Energy Council (AEC) represents 21 electricity and natural gas businesses operating in the wholesale and retail energy markets that claim to generate the majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses. The AEC brought together functions from previously separate bodies, including the Energy Supply Association of Australia, an earlier Energy Networks Association and the Energy Retailers Association of Australia. The group publishes a range of analysis, news updates and media releases, reports and submissions made through various fora on its website.

The Australian Petroleum Production & Exploration Association (APPEA) is the peak body representing Australia’s oil and gas exploration and production industry, has about 60 full member companies and claims that these members account for an estimated 98 per cent of the nation’s petroleum production. APPEA updates stakeholders through its news and media page, which includes industry publications.

The Australian Pipelines and Gas Association (APGA) is a peak body representing Australasia’s pipeline infrastructure, with a focus on gas transmission, but also including transportation of other products, such as oil, water and slurry. The APGA membership includes constructors, owners, operators, advisers, engineering companies and suppliers of pipeline products and services. APGA publishes ‘facts and figures’ on pipeline issues and supports the Major Pipelines of Australia map.

The Clean Energy Council (CEC) is the peak body representing the clean energy industry in Australia. It claims to represent hundreds of businesses operating in solar, wind, energy efficiency, hydro, bioenergy, energy storage, geothermal and marine along with more than 4000 solar installers. The CEC publishes many of its views and positions on the ‘Policy and advocacy’ page of its website.

Major Energy Users Inc (MEU) is an advocacy group for large users of energy and it provides input into all aspects of the energy markets, including to federal and state and territory governments and the energy market institutions of AEMC, AER, AEMO, the WA ERA, and the NT Utilities Commission. There were 22 members listed on the website as at November 2017. In June 2017 the MEU made a submission to the ACCC’s inquiry into electricity supply and prices that outlines the major user issues in the energy sector.

The Australian Photovoltaics Institute (APVI) is a national body that comprises companies, agencies, individuals and academics with an interest in solar energy research, technology, manufacturing, systems, policies, programs and projects. The APVI aims to use research, analysis and information to increase the use of PV. One of the APVI’s projects is a user-friendly Solar PV Maps and Tools site. The data and information includes, for example, live solar generation, PV performance by climate region and installations data.

The Energy Efficiency Council (EEC) is a peak body for energy efficiency, co-generation and demand management that exists ‘to make sensible, cost effective energy efficiency measures standard practice across the Australian economy’. The EEC claims to have 70 members for which it works to promote stable government policy, provide clear information to energy users and drive quality of energy efficiency products and services. It has published a number of papers, including the Energy Efficiency Policy Handbook,  a guide to policies for energy efficiency improvements in Australia.

Major international resources

There are numerous resources on the markets of individual countries, and a number of global industry bodies. The following resources may assist in placing Australia in an international context:

•        The International Energy Agency (IEA) works for 29 member countries on the four main topics of energy security, economic development, environmental awareness and worldwide engagement. A major resource from the IEA is the World Energy Outlook.

•        The multinational petroleum corporation BP publishes a regular Statistical Review of World Energy, including data and commentary on global energy markets. This resource helps in understanding major global energy market trends.

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[1].               The Northern Territory is not currently connected to the NEM or the Eastern gas market, and maintains independent regulatory authority through the NT Utilities Commission.