The Australian Energy Market Commission (AEMC) has called for submissions on the initial results of its new biennial review tracking the growth in liquidity in wholesale gas and pipeline trading markets.
Gas markets are currently 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 draft report found that liquidity on the Wallumbilla gas supply hub has increased over the past two years.
This positive change was reflected in almost all metrics of liquidity that formed part of the analysis.
Where information was available, metrics were also calculated for other facilitated gas markets including the Moomba gas supply hub, 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 draft report notes that with only two years of data, it is too early to assess the trends for gas market liquidity from these initial metrics.
Also, because the Moomba 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.
Importantly, these baseline measures will enable the AEMC to track progress and assess the effectiveness of reforms and the case for further reform to wholesale gas and pipeline trading markets over the longer term.
The biennial reviews will:
- 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 markets
- Identify the need for any further reforms, if appropriate
Submissions on the draft report are due by 24 May 2018. A final report is due to be published in August 2018.