The Australian Energy Regulator (AER) has published a series of gas liquidity metrics which are expected to enhance transparency in the energy market.
The new metrics, which add to the existing comprehensive suite of gas and electricity metrics on the AER’s Wholesale statistics webpage, will help the Australian Energy Market Commission (AEMC) in its new biennial reviews, tracking the growth in liquidity in wholesale gas and pipeline trading markets.
The AEMC has also published its final report into its first biennial review. This final report marks the culmination of the AEMC’s consultation process, which began in January 2018.
Gas markets are being redesigned to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia. The changes are based on a package of reforms developed by the AEMC and endorsed by the COAG Energy Council.
As implementation of the complete reform package will take several years, this first review of gas market liquidity provides a baseline for future reviews. The COAG Energy Council’s Terms of Reference expected the AEMC’s initial review to focus primarily on growth in liquidity that has occurred in the Wallumbilla GSH and Moomba GSH.
The AEMC’s final report found that in general, liquidity at the gas supply hub at Wallumbilla has improved over recent years. Because the Moomba location of the gas supply hub has only been in operation since June 2016, more time should be given for any of the related liquidity metrics to develop.
Where information was available, the AEMC also calculated metrics for other facilitated gas markets including the short-term trading markets, the Victorian Declared Wholesale Gas Market and pipeline capacity markets. Results for these other markets were more diverse across all metrics.
The AER has published metrics for the short term trading markets and the Victorian Gas Market for some time. The AER will publish its suite of liquidity indicators on a regular basis to promote market transparency.
Future AEMC biennial reviews will:
- Continue to monitor changes in liquidity in the wholesale gas and pipeline capacity trading markets
- Report on the effectiveness of reforms in the east coast and Victorian gas market
- Identify the need for any further reforms, if appropriate.