Ch-ch-changes in the east coast gas market

This submission is in response to the Australian Energy Market Commission’s (AEMC) Stage 2 Draft Report for the East Coast Wholesale Gas Market and Pipeline Frameworks Review and Draft Report: Review of the Victorian Declared Wholesale Gas Market. The AEMC has made substantive recommendations to restructure the wholesale gas market to promote liquidity and competition in the market. The AEMC has identified three priority areas to address key constraints in the market. These are the wholesale market and trading hubs, transmission capacity markets and information provision. The AEMCs recommendations include establishing a virtual market with entry/exit permits, improved and expanded reporting requirements for market participants and methods to encourage trading of capacity within the transmission sector. PIAC is generally supportive of the AEMC’s recommendations, but notes that there has not been enough emphasis on translating the recommendations into a form that end-users are able to understand and from which they can discern the impact of these changes. PIAC is also concerned that there has not been enough consideration of what a liquid market looks like, and on what basis it will be determined when the market has sufficient liquidity to benefit the end users. Finally, PIAC would like to see more detail on monitoring and transition mechanisms that would ensure that consumers are protected during these long-term market developments.