Elements of Reform Compared: EA v AU

Question 1

Compare political institutional

Answer 1

EU: member states v EU divide responsibility. Member States master of Treaty

Au: intergovernmental agreements between states and commonwealth. Constitutionally the states legislate in energy

Question 2

Policy agenda

Answer 2

EU: sustainability, competitiveness, security of supply
AU: competitiveness, security/reliability, productivity

Eu sustainability a function of the treaty
Au use market mechanism extensively

Question 3

Dependence on imports

Answer 3

Eu: heavily dependant (>50%) imported from sources outside of the state
Au: net exporter

Question 4

Establishing market

Answer 4

Eu: internal market in line with treaty (4 freedoms services, commodities, people and goods)

Au: establish economies of scale. Low population density requires large redundant generators to ensure supply UNLESS combines network without barriers (transmission loss and physical barriers)

Question 5

Unbundling or removal of vertical integration

Answer 5

Eu: 3 models - ownership, Independent Service operator, independent transmission service operator

Au: disaggregation quite similar across network but some states not fully privatised

Question 6

3rd Part Access

Answer 6

Eu: TPA regulated and RES-A priority access

Au: Connection under National Electricity Regulations and gas under AER

Question 7

Independent regulator

Answer 7

Eu: third package established ACER

Au: separate rule maker and rule enforcer - AER, AEMC

Question 8

Regulation

Answer 8

Eu: heavily regulated

Au: strongly regulated but utilises market forces extensively

Question 9

What lessons can be learnt from IMPLEMENTATION

Answer 9

Eu: discrimination exists without regulation

Au: common elements but each state applied liberalisation differently and therefore cost differences (100% uniformity not possible in AU political environment)

Question 10

What lessons can be learnt from ACCESS

Answer 10

Eu
Equal competition requires equal access

Au
Access fundamental, connection required for competition - you can’t participate without access

Question 11

What lessons can be learnt from POSITIVE DISCRIMINATION

Answer 11

Eu
May positively discriminate - small producers and renewables

Au
Technology neutral

Question 12

What lessons can be learnt from REGULATION

Answer 12

Eu
Market failures

Au
Time taken to develop