Submission on competition to Australian Energy Market Commission

by Rod Campbell, Hugh Saddler and Dan Cass

The Australian Energy Market Commission is considering a proposal to introduce a new rule in the national electricity market. The 5 Minute Settlement Rule Change is a very technical but important rule, which the Australia Institute believes would increase competition.

Currently, gas peaking plants provide the energy to respond to rapid changes in demand. If the new rule is implemented it would expose gas to competition from battery and demand management technologies, which can respond far more quickly. This will help smooth out price spikes and lower costs for all energy users.

The Australia Institute’s submission says the the rule change should increase competition in the wholesale energy market, thereby lowering prices. It would facilitate the entry of more decentralised, clean energy such as solar and also demand management technologies, most notably energy storage batteries. That will help Australia make the necessary transition out of coal and gas to clean energy.

The Australia Institute recently published a report on battery storage and how it solves the problem of variability of renewable energy.

Full report