HANSARD
SITTING CALENDAR
SEARCH
LIVE BROADCAST
Hansard Dynamic Member Index
House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-06-03 Daily Xml
Contents
Pdf Xml

NATIONAL GAS (SOUTH AUSTRALIA) (NATIONAL GAS LAW—AUSTRALIAN ENERGY MARKET OPERATOR) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 13 May 2009. Page 2694.)

Mr WILLIAMS (MacKillop) (12:50): I am not sure of the order in which these bills were introduced, but this bill very closely reflects the next bill, the National Electricity (South Australia) (National Electricity Law—Australian Energy Market Operator) Amendment Bill. I will make most of my comments with regard to that bill simply because that is the order in which I went through the bills. Most of my comments are more relevant to that bill but they apply also to this bill. For those who take a keen interest in this (and I am sure there are many out there), as they are reading the Hansard I will direct them to follow the debate onto that other bill to get a better understanding of the opposition's thoughts on this matter.

Having said that, can I say that this bill does consolidate the operation of a number of organisations within the various jurisdictions—again, down the eastern seaboard, South Australia and the ACT—to establish an Australian Energy Market Operator. Of course, that market manager will also operate the electricity market. It is interesting because, I am told, there are some differences between how the new law will operate with regard to gas as opposed to electricity. They principally occur because the different jurisdictions have come up with different ways of ensuring that their market operates efficiently and effectively with different systems to ensure the continuation of supply, particularly under emergency circumstances.

I understand that there will be some differences in the way in which the operations continue to occur, say, between the states of New South Wales, Victoria and South Australia, because different regimes have been put in place in those states and that the rules and the operation of the market will recognise the different contexts of each of those markets and supply systems. We know of the experience some years ago now where the Longford explosion in Victoria caused the Victorian government and the industry to put in place certain things to try to minimise those sorts of impacts when there was a major problem within the gas supply system.

We have seen a number of examples, not just nationally but internationally, of what can occur to a society when you do get a major breakdown in energy supply. We saw a similar problem with gas in Western Australia a few years ago (it might not be quite that long ago); we saw a significant problem in Auckland, New Zealand, with electricity a couple of years ago; and we saw a very significant problem on the north-east coast of North America a few years ago when the electricity system totally collapsed. This is one of the things that needs to be managed in terms of integrating systems together, that is, the national electricity market and the national electricity grid, and likewise for the gas system.

We do need to manage them as we go forward, and we need to be cognisant of the risk we provide over a much greater area. Obviously, bringing together operations between the various states, in this instance, Queensland, New South Wales, Victoria, South Australia and the ACT, has advantages, and they were pointed out in the minister's second reading explanation. However, there are also added risks whereby we can have a contagion where the system falling over in one of those jurisdictions can impact severely on the other jurisdictions. It is important that we get these processes right.

This particular bill does add a new dimension to the way that the gas laws will work, and it gives a new function to the Australian Energy Market Operator in so much as that it will now have the function of preparing a gas statement of opportunities. This is not unlike what has already occurred in the electricity market under NEMMCO with the statement of opportunities for the national electricity market. Again, this is part of the planning process going forward. I will talk more about the new planning functions, as I intimated earlier, when we get onto the other bill.

I can inform the house that the opposition is happy to move directly to the third reading and supports the bill.

The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (12:55): The only thing I would say in response is that the gas market is different from the electricity market in a number of ways. The nature of gas, being molecules, is that you can store it, as opposed to electrical activity having to be created as it is consumed, so to speak, so it is different. There are a number of other differences as well. This is gas going to a national market for the first time, whereas with the other law we are dealing with a much more mature national market; and there are differences that arise from the nature of different jurisdictions' supply of gas.

Victoria, you will see, is the only one with a wholesale market function in VENCorp. I am reliably informed by technical experts that is because the short pipes do not allow for much line pack in Victoria whereas, here, with long pipes and lots of line pack, we do not have the same need to deal with fluctuations in the wholesale market. I do not think we ever have, except in the case of some intervention to protect pricing when Moomba went down. I think we acted to make sure that no-one scalped, basically, when they were swapping gas between systems. I do not think there has been any other occasion. I do not know, because they may do it privately with their own arrangements. Anyway, it is a different system, for those reasons.

If members look back, they would remember when the national electricity market started up with a whole load of derogations from the national rules, which gradually were eliminated over a period of time. So I would expect the gas market itself will mature and there may be something closer to a national set of rules for aspects of it.

Bill read a second time and taken through its remaining stages.


[Sitting suspended from 12:58 to 14:00]


PARLIAMENTARY BUSINESS
MEMBERS
GET INVOLVED
ABOUT PARLIAMENT
VISIT
LEGISLATIVE COUNCIL
HOUSE OF ASSEMBLY
CONTACT