Mark Collette of Energy Australia (previously TRUenergy) summed up the core market dilemma best when he told attendees: “A structurally oversupplied NEM that forces in additional capacity on zero short-run marginal cost in the face of falling demand threatens the longer-term sustainability of the market.”
Mr Collette argued that there four key issues to be addressed:
- Rebalancing supply and demand as consumption falls;
- Ensuring generator shutdowns are efficient;
- Managing change to the renewable energy target while retaining investor confidence; and,
- Ensuring that retail prices reflect both variable and fixed costs facing suppliers.