Measures to increase market transparency
On 15 March 2017, the then Prime Minister, Malcolm Turnbull, announced a range of measures to help deliver cheaper and more reliable energy to Australian households and increase gas supplies for businesses. One of the measures that was announced at this time was the requirement for the Australian Competition and Consumer Commission (ACCC) and the Gas Market Reform Group (GMRG) to work together to provide advice on “options to quickly improve transparency in the gas market, to facilitate competition between producers and information for purchasers.”
In keeping with this requirement, the GMRG and ACCC have worked together to identify the information deficiencies in the east coast gas market and the measures that could be taken to address these. The results of this work revealed that:
- The level of transparency in the east coast gas market is poor compared to other developed countries, with market participants in the east coast having access to less information on key supply and demand fundamentals than is available to their counterparts in New Zealand, the United States and the European Union.
- While steps have been taken to improve transparency, there are still a number of significant information gaps and asymmetries that are adversely affecting the efficient operation of the market and the efficiency with which gas, infrastructure services and other resources are allocated.
- The effects of these information deficiencies on the market are even more acute at present, given the relatively tight supply and demand balance and limited competition in the supply, retail and infrastructure segments of the supply chain
The information deficiencies that have been identified primarily relate to information on:
- reserves and resources, contracted reserves and other indicators of upstream activities;
- infrastructure availability and developments;
- wholesale gas prices, retail gas prices and the prices payable for infrastructure services (i.e. pipeline, compression and storage services); and
- LNG shipments and prices.
To address the information deficiencies, the GMRG and ACCC have recommended 18 measures to improve the transparency of the gas market, many of which would be mandated through the inclusion of new reporting obligations in the National Gas Law (NGL) and National Gas Rules (NGR).
On 19 December 2018, the Energy Council tasked the Senior Committee of Officials with developing a package of measures to address the report. A first step will involve consulting on the ACCC and GMRG recommendations and draft amendments to the National Gas Law, Regulations and Rules that would give effect to these measures.
The recommendations and draft legislation will be open for public consultation in the first half of 2019. This will inform the design of a final package of measures which will be brought to the Energy Council for endorsement by the end of June 2019. Details of the consultation process will be announced on the website in early 2019. It is hoped measures will be in place by April 2020, when the ACCC’s Gas Inquiry concludes.
A Consultation Regulatory Impact Statement (RIS) has been released examining options to improve transparency in the eastern and northern Australian gas markets.
The RIS focuses on addressing information gaps and asymmetries relating to gas and infrastructure prices, supply and availability of gas, gas demand, and infrastructure used to supply gas to end-markets.
Stakeholders are invited to submit a response by 5PM AEST on 12 September 2019.