Home' Future Building: The Australian Infrastructure Review : Volume 8 Number 1 Contents futurebuilding
Dr Kerry Schott AO
Dr Kerry Schott AO, Chair,
Energy Security Board
High consumer prices, uncertain emissions reduction policies and energy reliability are now major issues.
Political overreaction in the energy sector is unable to deliver sound policy outcomes.
There is no single measure to ‘fix’ the electricity market; it will rely on a suite of responses.
I have recently been appointed as Chair of the Energy Security
Board (ESB). Being someone who enjoys a challenge, I
accepted the role.
The key task of the ESB is to implement the recommendations
in the Final Report of the Independent Review into the Future
Security of the National Electricity Market (the Finkel Report),
which is a blueprint for how to reform the electricity market.
The other members of the ESB are:
► Clare Savage (Deputy Chair)
► Paula Conboy
► John Pierce
► Audrey Zibelman.
The National Electricity Market (NEM) has existed for
about 20 years. It is a wholesale market for electricity across
Queensland, New South Wales, the Australian Capital Territory,
Victoria, South Australia and Tasmania. It does not include the
Northern Territory or Western Australia.
The interconnectors across the state boundaries are
quite thin. Recently, the New South Wales Minister for
Energy remarked that the ‘market is hardly national’. This is
a valid statement, given that the grid is constrained by power
connections across state borders.
Within the NEM, generators provide electricity and bid at
five-minute intervals across the day. The Australian Energy
Market Operator (AEMO) then ranks the bids from cheapest
to most expensive in order to meet the demand required by
the market. The NEM then dispatches energy, and AEMO’s
role is to ensure that the system remains stable as energy is
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