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Energy markets beyond 2000 a time of change



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ABARE

Media Release

#OL99/33

Innovation in Economic Research GPO Box 1563, Canberra ACT 2601 Facsimile (02) 6272 2001

- International code 616

http://www.abare.gov.au

18 M arch 1999

Energy markets beyond 2000: a time of change

‘Extension of the electricity grid is one of the most significant developments for the national electricity market beyond 2000’, Ms Jane Melanie, Senior Energy Analyst, ABARE. said today at OUTLOOK 99 in Canberra. Speaking at the session, Energy Market Reform, M s Melanie outlined how planned investment in the electricity grid totalling an estimated $2 billion will have important economic and environmental implications for both electricity consumers and suppliers.

‘Greater supply competition, changes in the fuel mix used in generation, and enhanced system security and reliability are all potential impacts o f new grid interconnections’, Ms Melanie said.

M r Terry Thom, of Enron International, emphasised the importance o f risk management strategies in a world where energy markets are continually changing. ‘The energy industry is now noted as much for its financial products as it is for its physical side’, he said. M r Thom also warned of the potential costs and inefficiencies associated with public ownership of

energy assets.

D r Ralph Craven, General Manager, Shell Coal Pty Ltd, also emphasised risk management. ‘The greatest risk to new entrants in the electricity market is electricity price volatility’, he said. ‘Risks traditionally borne by customers have now been transferred to the investor’, he noted.

M r G eoff Swier, Department o f Treasury and Finance, Victoria, highlighted the importance o f gas market restructuring. ‘All parties, whether or not they support Victoria’s gas reforms, see a role for a gas spot market at the wholesale level’, M r Swier said. ‘Spot markets are an essential feature of any efficient, competitive commodity market’, he added.

Speakers at the session, Energy market reform, were: Ms Jane Melanie, Senior Energy Analyst, ABARE; Mr Terry Thom, Executive Vice President International Government Relations and Environmental Affairs, Enron International;

NIf Geoff Swier, Deputy Project Leader, Energy Projects Division, Department of Treasury and Finance, '■^Victoria; , ( r r .

Dr Ralph Craven, General Manager, Shell Coal Pty Ltd, Brisbane.

For further information contact: During the conference, Margaret Day, OUTLOOK Media Centre on (02) 6276 5242 or 018 487 825 After the conference, Ms Jane Melanie, ABARE on (02) 627 2246.

ABARE acknowledges the support o f its major O utlook conference partner, Cisco Systems.