Nexa Advisory Submission – NEM Wholesale Market Settings Review
Nexa Advisory welcomes the opportunity to share our views on the National Electricity Market Wholesale Market Settings Review.
The NEM Wholesale Market settings Review offers an important opportunity to address the evolving challenges in Australia’s energy sector. However, for this review to succeed, the problem to be solved must be clearly articulated and agreed on by the vast stakeholders involved, before any new mechanisms are introduced or recommended. Without clear definition of the issues being addressed, we risk proposed solutions being ineffective or misaligned with the long-term needs of the market – whether they concern the physical system or financial and contracts market.
It is critical that this Review considers how the ‘basics’ of the transition can be addressed, ensuring coal-fired generation is closed on time to deliver efficient investment and maintain a stable and reliable system. We consider these can be implemented under the current market paradigm and may be best addressed through changes outside of the wholesale market.
Our submission details how the current energy-only market design can provide enduring market signals and certainty required for an orderly energy transition, when complemented by:
- a mechanism which ensures the reliability certainty needed to advance the NEM to the post-coal era such as a strategic reserve;
- improved outcomes in the contracting markets, to support project financeability for firming technologies such as energy storage and batteries; and
- the role of demand side management and consumer energy markets (homes and businesses).
Read our submission here: Nexa Advisory – NEM wholesale market settings review submission
