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Focus on reforming the electricity market


Source: ABC, 21 July 2016

Addressing South Australia's volatile electricity prices and ensuring system stability will be a focus of the Council of Australian Governments (COAG) Energy Council when it reconvenes.

Federal Energy Minister Josh Frydenberg said South Australia was a key example of the need to ensure stability while transitioning to more renewable energy.

But one analyst said the country's energy ministers should already have been working on reforming the national market.

Grattan Institute's Tony Wood said the current system was designed for a very different world and South Australia's prices should be a wake up call.

"We are trying to reinvent it [the system]. As we do so there will inevitably be a lot of consequences," Mr Wood said.

The Australian Energy Market Commission (AEMC) has announced a review of the national market. It will look at whether the current wholesale energy market frameworks can support increasing volumes of renewable energy and maintain system security.

Mr Wood said the COAG Energy Council needed to take responsibility.

"They've not really focussed on this issue in the way they should have done over the last couple of years," he said.

"What I'm saying is that while the AEMC's review is absolutely appropriate and none to soon, I think it does mean that the COAG energy council, as soon as it's reconstituted, really should put in a place a structure to focus completely on this issue."

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