The Australian Energy Regulator has sounded the alarm over the growing market power of Snowy Hydro as an increasingly important provider of back-up power for renewables, which it says have the potential to further increase costs in an electricity system where households are already struggling with higher bills.
“The AER’s anticipated new powers in relation to contract market monitoring will allow us to better monitor participant behaviour and gain sharper insights on issues of competition and market power,” Ms Savage said in the regulator’s annual assessment of electricity and gas markets.
“These inefficiencies can cause major market impacts if intermittent generation output is low over an extended period.”– have previously called for Snowy to be broken up to spur competition and help rein in prices for consumers, given its building position in peaking power generation and growing retail business.
“Increasing concerns about energy affordability present the backdrop to this report,” Ms Savage said, pointing to the rising number of customers in energy debt and pledging “diligent market surveillance and reporting”. With coal power still meeting almost 60 per cent of Australia’s electricity demand and four coal generators due to close over the next decade, “the investment need is pressing and widespread across the NEM”, it said.
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