AEMO – Gas Market reforms deliver improved trading capabilities to Australia’s east-coast
Source: Media Release - AEMO
21 Mar 19
The Australian Energy Market Operator (AEMO) has today announced the successful launch of the Capacity Trading Platform (CTP) and Day Ahead Auction (DAA) market mechanisms, delivering improved trading capabilities and more liquid secondary capacity trading to Australia’s east-coast gas markets.
Endorsed by the COAG Energy Council in August 2016, and effective from 1 March 2019, the new mechanisms are the result of recommendations made by the Australian Energy Market Commission (AEMC) as part of their Eastern Australian Wholesale Gas Market and Pipelines Framework Review.
“The new CTP is an exchange that allows participants to trade forward haul, compression and storage capacity with other participants, while the DAA is a daily auction of unutilised contracted capacity on gas transportation facilities,” said AEMO’s Chief Strategy and Markets Officer, Peter Geers.
“This allows industry participants to trade unused transportation capacity on major pipelines and compression facilities across the east coast, which will improve the efficiency of our gas transmission networks, promote trading capabilities between market participants, and improve access and competition between our short-term gas markets,” said Mr Geers.
“Since the DAA’s commencement, we have seen around 90 terajoules (TJ) of capacity allocated each day, which is already showing positive flow on effects to Australia’s east-coast gas markets,” said Mr Geers.
The new markets will utilise the market arrangements of the existing Gas Supply Hub, which is celebrating its fifth birthday today.
“Since its launch exactly five years ago, the Gas Supply Hub has grown rapidly, starting with a commodity value of $4.82 million in the 2014 calendar year, and growing to an impressive $147.4 million in the 2018 calendar year,” said Mr Geers.
“This demonstrates that the Gas Supply Hub continues to deliver on our objective of enabling improved wholesale trading for the east coast gas market,” said Mr Geers.
The launch of these two new mechanisms has also coincided with a new contract framework that sets out key standard terms for the secondary trading of capacity, and the reporting framework for secondary capacity trades, providing industry participants with the terms and framework they need to make best-use of these new mechanisms.
“This Pipeline Capacity Trading Project required significant engagement with industry participants and included many interactions through a range of industry groups and other governance forums,” said Mr Geers.
“I would like to personally thank all AEMO employees, the Gas Market Reform Group and industry participants who provided their valued input throughout this project’s lifecycle, demonstrating that collaboration continues to be a key driver behind delivering energy market solutions and efficiencies,” said Mr Geers.