A Review of Experience with Commercialising and Regulating Network Services in the Australian Electricity Industry

Abstract

The electricity industry operates by maintaining a continuous flow of electricity fromgenerators to end-use equipment in an uncertain environment in which both availability and qualityof supply are important. Network equipment operating in a holistic manner plays a critical role inmaintaining acceptable industry operation and yet this role is not clearly separable from the rolesplayed by generators and end-use equipment. Thus the services provided by the network are notclearly separable from the services provided by generators or loads, and the services provided byindividual items of network equipment are not clearly separable from each other nor from thoseprovided by the network as a whole. Some aspects of the treatment of network services in theAustralian electricity industry sometimes reflect these characteristics but other aspects do not,leading to incompatibilities and contentious issues. There are clear improvements that could bemade and many of these have been identified in recommendations of a number of industry inquiriesand reviews. However, it is not clear that there is the understanding or political will to implementthem.