Transparency 'key' to gas market's long-term future
The head of one of the largest energy utilities in Australia, EnergyAustralia, has thrown his weight behind the need to boost gas market transparency as the development of several gas export projects in Queensland threatens to drive prices higher.
In a speech to be delivered on Thursday, EnergyAustralia managing director Richard McIndoe will outline the need for change, only days after a Grattan Institute report highlighted the emerging difficulties in the sector.
"The structures that served us to this point no longer suffice," Mr McIndoe will say. Over the past 20 years, east coast gas markets had undergone big changes that were yet to deliver "national, long-term transparent gas pricing and liquid markets".
"In Australia, the energy value chain - retail, production, transmission - is held by just a few. The size of our market, particularly the number of players, places a massive premium on transparency.
"The gas market structures that have underpinned the industry in the past simply are not up to the challenges of the future."
Mr McIndoe called for transparency in gas markets, which would help pave the way for the needed investment in new production - "critical if we are to avoid a supply crunch and unnecessarily high prices into the future".
"Liquidity will transform the market by providing a visible and tradeable price for gas ... And consumers will have in their hands the information to know they are not paying more for gas than their neighbours, their competitors or overseas markets.
"They're empowered with the knowledge they're getting access to gas at a competitive price."