Addressing oversupply in wholesale energy market and the outlook for the energy mix

Access expert analysis on the outlook for demand and supply for both electricity and gas markets.

Access expert analysis on the outlook for demand and supply for both electricity and gas markets.

The national electricity market (NEM) is experiencing a period of chronic oversupply.

This is a result of falling demand for electricity over the last five years, the renewable energy target (RET) and a number of generators within the NEM operating past their intended life.

Short term, the suppressed wholesale prices that stem from this are great news for end users. However, it is making it significantly more difficult to attract the additional investment needed to meet RET targets and is leading to the mothballing of cleaner gas plants in favour of older coal stations – a poor outcome for the environment.

This is occurring at a time when there are a number of new technologies which are rapidly becoming more cost efficient and quickly entering the wholesale market at a large and small scale level.

In the lead up to the event, Alinta’s General Counsel, (and member of the event’s advisory panel) Michael Riches said, “The challenges that face today’s energy markets are immense.  All market participants need to come together to discuss and propose solutions to ensure a viable and effective energy market into the future.”

As such, addressing oversupply and understanding how the energy mix might evolve are two of the central themes of the Eastern Australia’s Energy Markets Outlook conference, being held from 15 – 18 September in Sydney. The conference brings together over 40 speakers from the length of the energy supply chain to share the views and give all in attendance a far deeper understanding of the issues and the solutions that may be available.

The conference session focused on the wholesale market is sure to be a highlight, with the panel discussion on overcoming oversupply in the wholesale market bringing together CEO’s from CS Energy, Hydro Tasmania and the ESAA, Alinta’s General Counsel join John Pierce, Chairman of the AEMC for what is sure to be a conference highlight.

As well as oversupply, a key issue fir the market is trying to understand which technologies will continue to maintain their place in the energy mix and which might rapidly grow. Forms of small scale distributed generation, including solar, fuel cells and biomass all have great opportunity and could transform the east coast energy mix. Similarly, changes in information technology and tariff structure could significantly impact their uptake.

The Clean Energy Finance Corporation’s COO, Meg Mcdonald will be discussing at the event the exciting outlook for a number of renewable technologies and their role in the NEM goings forwards. She said: “Renewables and new technologies are set to play an increasingly important role in helping drive energy and operating costs and reducing carbon intensity of the economy. The EAEMO conference provides a timely for discussion of these trends”

The big question all of this raises for market participants is how existing utilities will react to the changing dynamics. Ian Mcleod, Chief Executive Officer of Ergon Energy and one of conference speakers said: “The markets have never been more relevant to customers and the industry. Demand, supply, services and information will all become commoditised. How do we differentiate and create value? EAEMO 2015 will be an opportunity for insight and reflection.”

If you are a stakeholder in east coast energy markets, then this is the not-to-be-missed conference in 2015, delivering a huge range of energy content, from leading industry experts in just a few days. To get more information, please download the conference brochure here.

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