AUSTRALIA Law and Practice Contributed by: Alexander Danne, Roy Groom, Rohit Venkat and Georgia Summerhill, Clayton Utz
Clayton Utz Level 15 1, Bligh Street Sydney NSW 2000 Australia
Tel: +61 2 9353 4000 Fax: +61 2 8220 6700 Email: adanne@claytonutz.com Web: www.claytonutz.com
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry Australia’s power industry is structurally separated across four distinct segments: generation, transmis- sion, distribution and retail. Given the country’s geographical scale, three separate wholesale electricity markets operate concurrently: the National Electricity Market (NEM), the Northern Territory Electricity Market (NTEM) and the Wholesale Energy Market (WEM). The NEM is one of the world’s longest interconnected power systems, spanning the eastern seaboard and connecting New South Wales, the Australian Capital Territory, Queensland, South Australia, Victoria and Tasmania. Electricity generated in these regions is dispatched and traded between them. The WEM is located in Western Australia. There are smaller networks in remote areas, including the North West Interconnected System (NWIS) in the Pilbara and the Northern Territory Electricity Market (NTEM), and they account for less than 5% of Aus- tralia’s electricity consumption. Principal Laws Governing Ownership and the Structure of the Industry Electricity As a federation, Australia’s energy market is governed by a combination of national and state or territory laws, the application of which varies by jurisdiction.
NEM jurisdictions The NEM operates under a nationally harmonised legislative framework. The principal legislation is the National Electricity Law (NEL), scheduled to the National Electricity (South Australia) Act 1996 (SA) and adopted in each participating jurisdiction through cor- responding application Acts. The NEL is supplemented by the National Electricity Rules (NER), made under the NEL by the Australian Energy Market Commission (AEMC). The NER pre- scribe detailed regulatory requirements for market participants, network service providers and system operation. The retail segment is separately legislated under the National Energy Retail Law (NERL), scheduled to the National Energy Retail Law (South Australia) Act 2011 and adopted in each participating jurisdiction through corresponding application Acts. The NERL regulates the supply and sale of both gas and electricity and is supported by the National Energy Retail Rules (NERR). Victoria has not adopted the NERL but is instead gov- erned by the Victorian Energy Retail Code, which per- forms a substantially similar function. While the NEM is underpinned by the national laws described above, each state and territory also pass- es specific application legislation to implement the national framework, alongside localised provisions addressing retail pricing, connections and consumer protections.
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