AER’s State of the energy market 2013 report

20 Dec 2013

Published by Australian Energy Regulator

The Australian Energy Regulator has published the State of the energy market 2013 report which highlights developments in the energy market that are helping to stabilise retail energy prices.

“Declining electricity demand has led to surplus generation capacity in eastern Australia. This will delay the need for new investment in generation by up to a decade,” AER Chairman Andrew Reeves said.

“Some investments in electricity networks and gas pipelines have been deferred. The cost of financing energy business is falling as stability returns to global financial markets.

“Electricity retail prices are starting to stabilise in some States. Regulated prices in New South Wales, Tasmania and the ACT will rise by less than 4 per cent in 2013–14, compared with double digit rises in 2012–13. Retail prices in some parts of the New South Wales network will fall in 2013-14.”

Mr Reeves explained that new energy rules aim to avoid unnecessary price rises in the future. “During 2013 the AER consulted with energy businesses and consumers - developing Better Regulation practices, including a new approach to setting rates of return for network businesses, new methods of assessing efficient investment and greater stakeholder involvement.” The new approach will apply to regulatory determinations taking effect from 2015.

“Developments in the eastern gas market differ from those in electricity,” said Mr Reeves. “While domestic demand has weakened, preparation for liquefied natural gas export to meet rapidly growing international demand is placing upward pressure upon domestic gas prices.”

The AER regulates energy markets and networks in the eastern and southern Australian states. It is an independent body under the Competition and Consumer Act 2010, and its functions are set out in national energy market legislation and rules.

Download a copy of AER's State of the energy market 2013 report


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