Industry News


13Th december 2016


Is it ok for the regulator to ignore electricity networks’ extraordinary profits?

By Hugh Grant on 6 December 2016



The report from Responsibility provides a great insight as to returns on regulated energy investments.


Whilst we are not validating the report's numbers we are confident that Australian regulated energy businesses are receiving profits well above those of a competitive market. Until recently, many such businesses were receiving a return on assets (ie interest payments) at a rate of around 10% p.a .indexed by CPI......and this was happening when interest rates in the Australian market were at or near record lows!


Also until recently the businesses have been (in our view) able to "game" the Australian Energy Regulator (AER)  by cherry picking cost to challenge in the AER's periodic reviews. That is, it was all one way.


Unfortunately, as there is no competition,  the only game in town the business has to beat is the AER. Whilst it is a tough gig being a regulator under these circumstance, the AER continues to strive to achieve cost reflective returns in what has become a game of "catch me if you can".


Craig Marschall

Managing Director

Trans Tasman Energy Group





11TH AUGUST 2016


New sources of electricity like wind and solar power are changing the way Australia's power system works.  

The Australian Energy Market Commission has announced a review on whether wholesale energy market frameworks are suitable to complement increasing volumes of renewable energy and to maintain power system security as the industry transforms.

  • The System Security Market Frameworks Review will address the need for possible changes to market arrangements that lead to more efficient outcomes for energy consumers while delivering a secure operating system.
  • Challenges in maintaining power system security are emerging because of the physics of maintaining technical generation parameters like voltage and grid frequency.
  • Conventional electricity generation, like hydro, coal and gas, operate with large spinning turbines that are synchronised to the frequency of the grid. These generators  support the stability of the power system by working together to maintain a consistent operating frequency.
  • Less conventional forms of electricity generators, such as wind and rooftop solar, are not synchronised to the grid and are therefore limited in their ability to dampen rapid changes in frequency or respond to sudden large changes in electricity supply or consumption.