Electricity Market Review Phase 2
Information Paper: Energy Market Operations and Processes
project
Following Phase 1 of the Electricity Market Review, Cabinet approved the commencement of
Phase 2 of the Electricity Market Review including the detailed design of reforms (Stage 1) and,
subject to government approval, the implementation of reforms (Stage 2).
Project scope
The Energy Market Operations and Processes project incorporates various reforms Wholesale
Electricity Market relating to the energy and ancillary service markets, including:

the transition to a constrained market design;

reducing the gate closure period;

co-optimisation of energy and ancillary services markets to reduce the cost of these services
and enable more efficient development of competition in these services;

changes to the design of the Short Term Energy Market (STEM);

facility bidding for all market participants; and

a review of market power mitigation measures.
Project objective
The objective of Stage 1 of the Energy Market Operations and Processes project is to develop an
Implementation Proposal for re-design of the energy market operations and processes in the
Wholesale Electricity Market, for consideration by government during 2016.
The Implementation Proposal will include:

recommendations in respect of primary design parameters for the re-designed markets;

estimates of the costs to implement the recommended design;

estimates of the cost savings that would be achieved under the recommended design; and

a high-level plan and time estimate to implement the recommendations.
A detailed project plan for the implementation stage (Stage 2) of the Energy Market Operations
and Processes project will be developed following endorsement of the Implementation Proposal.
Project fact sheet: Energy Market Operations and Processes project
What specific market design features will be considered?
The recommendations to be developed during Stage 1 of the project will cover both economic and
technical aspects of market design, as shown in the chart below.
What is the schedule and how can I get involved?
Following the announcement to transfer market and system operations to the Australian Energy
Market Operator (AEMO), the project schedule has been updated to seek and incorporate advice
from AEMO. It is now expected that a single Position Paper (incorporating economic and technical
design recommendations, and an assessment of costs and benefits) will be published by the
Public Utilities Office for stakeholder comment in early 2016. The updated schedule below outlines
major project activities and key opportunities for engagement going forward.
Invitations to meetings and workshops will be sent through the Electricity Market Review mailing
list (please email [email protected] to join the list). Reports, consultation
information and other project updates will be posted to the Electricity Market Review website.
How can I get more information?
Stakeholders with specific enquiries related to this project are encouraged to contact Greg Ruthven
(Project Lead) on 6551 1265 or by email at [email protected].
Updates specific to the Energy Market Operations and Processes project will be posted to the
Electricity Market Review website.
Department of Finance | Public Utilities Office