The Australian Government has released a new Energy White Paper in a bid to position Australia's energy market as internationally competitive and improve energy security.
The objective of the white paper is threefold: increasing competition to keep prices down, increasing energy productivity to promote growth, and investing in Australia's energy future.
On the subject of opening up the sector to competition, the Australian Government states in the paper that it sees advanced metering as an "enabling technology" to help with the rollout of cost-reflective tariffs and allow consumers to respond to price signals.
The government also wants to see further development of market frameworks to encourage innovative products and services that give consumers more choice in managing bills and support greater competition as well as privatisation of state-owned electricity assets to increase productivity and competition.
Increasing energy productivity
When it comes to increasing energy productivity to promote economic growth, the paper makes provision for a National Energy Productivity Plan that provides national action in cooperation with the states and territories and industry, covering the built environment, equipment and appliances, and vehicles with a view to improving national energy productivity by up to 40% by 2030.
The Australian government also views the country as a "global energy superpower", according to the document, with the potential to expand its exports of energy resources.
Within the next five years, Australia’s yearly export earnings from energy resources commodities are projected to reach AUS114 billion (US$88 billion), according to the Department of Industry and Science.
The paper states: "Given the dynamism of international energy markets and the Australian economy, the best way to ensure energy supply at the lowest possible cost is to build more competitive energy markets."
Australian electricity prices
The Australian Government Department of Industry and Science: Energy White Paper 2015 comes as the Australian Energy Market Commission expects residential electricity prices to fall in 2014-15 in most jurisdictions following the removal of the carbon tax, following hikes in recent years.
Over 2015-16 and 2016-17, prices are expected to show modest declines or be stable across most states and territories because of subdued wholesale energy costs and lower network prices, the paper reports.
Despite cost reductions from the removal of the carbon tax, gas prices are rising as they move toward parity with an international price. This is due to Australia’s increasing links to international gas markets and rising domestic production costs.
These price movements bring into sharp focus the role of energy markets in delivering economic growth from our natural resources.