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Transforming Australia’s electricity market

Insights and lessons for electricity network operators

OVERVIEW

What and where are the most relevant, innovative electricity business models and market constructs that can inform the future of electricity markets?

To find the answers, Energy Networks Australia and CSIRO, as part of the Electricity Network Transformation Roadmap commissioned Accenture to consider how several markets across the globe are rapidly transforming their energy ecosystem. We found that unlike Australia, where current reforms are incremental, other markets are undergoing significant rapid transformation, driven by a clear vision of the future.

The report, Network Transformation Roadmap Insights from Global Jurisdictions, New Market Actors & Evolving Business Models, is especially relevant for Australian utility executives. It seeks to draw insights and potential lessons from events and trends around the world. Broadly, it aims to inform energy market stakeholders across the value chain, with findings and insights for transmission and distribution businesses, energy retailers, regulatory bodies and policymakers.

Seven global jurisdictions including Australia and seven diverse "New Market Actors" are explored. The seven jurisdictions are New York, California, Texas and Hawaii in the United States, as well as the Netherlands, the United Kingdom and Australia. These regions were chosen based on their objectives, drivers, motivations and current capabilities.

The insights and lessons are particularly relevant for Australia. These insights could help inform possible future directions for the Australian electricity market to maintain its relevance for future customer needs and create opportunities for new energy players looking to respond to energy market transformation.

READ THE EXECUTIVE SUMMARY [PDF]

READ THE FULL REPORT [PDF]

VIEW THE SLIDESHARE [PDF]

KEY FINDINGS

The Australian electricity market generally compares favourably with other jurisdictions in terms of capabilities, competition and deregulation. Each jurisdiction is unique and has their own challenges and opportunities. Certain insights can be gained from their current progress. Insights relevant to the Australia electricity market include:

  1. Evolving network operator business models will benefit more from longer term visions.

  2. A vibrant and competitive retail sector aids third party innovation.

  3. Visionary reform helps to align network operators with enhanced customer outcomes.

  4. Focus on Distributed Energy Resources (DER) interconnection can facilitate business evolution.

  5. Wholesale market participation can open up new value streams and enhance grid reliability.

  6. Government aided "experimental room" facilitates partnerships to build new business models.

  7. New Market Actors (NMAs) provide an opportunity to partner and co-create value.

Interestingly, New Market Actors (NMAs) are finding Australia a hospitable market to test their business models. With high energy prices, relatively fast consumer adoption and a liberalised market structure seen as being advantageous, more NMAs from around the world will continue to target Australia.

However, without a longer term vision and "whole-of-market" approach, Australia may not be optimally prepared for the challenges the country now faces. To remain competitive against global market leaders, the Australian energy sector should learn from global leaders leapfrogging traditional approaches. A focus on defining new visions and establishing ambitious targets to inform the development of new market models will be key.

The insights from this report offer utility executives the chance to better understand and learn from reform initiatives around the world. Seeing how new competitive players are viewing the Australian electricity market, the industry should be better placed to design a future that is not only adaptable, but adds value to the entire industry.

READ THE EXECUTIVE SUMMARY [PDF]

READ THE FULL REPORT [PDF]

VIEW THE SLIDESHARE [PDF]

THE FINKEL REVIEW

Since the preliminary summary of "The Finkel Review" was released in Australia during December 2016, the Accenture Strategy Utilities team compiled a simplified summary presentation of this report. Click here to view the summary which explores the issues Australia needs to address to ensure the future security of the National Electricity Market (NEM). 

VIEW THE SLIDESHARE [PDF]

AUTHORS

Simon Vardy

Simon Vardy

Managing Director
 Utilities Strategy Australia and New Zealand
Accenture

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Simon Vardy

Simon Mezger

Managing Director 
     Resources Strategy, Asia Pacific         
Accenture   

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Frank Ochel

Frank Ochel

Senior Manager
Utilities Strategy Australia and New Zealand
Accenture

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