The Wholesale Electricity Market Rules (WEM Rules) include provisions to protect against generators with large market shares, or who hold particular assets that are critically required at particular times, from making unreasonable offers and increasing wholesale electricity prices above efficient levels.
Energy Policy WA engaged The Brattle Group, an internationally-renowned economic consultancy specialising in market power mitigation in energy and other markets, to provide advice on this matter. Energy Policy WA has prepared a Directions Report (available below) that sets out its considerations of key findings of The Brattle Group report ‘Implementing Recommended Improvements to Market Power Mitigation in the WEM’, also available below.
Energy Policy WA has recommended that amendments to the WEM Rules are made to clarify the:
- concept of SRMC in the WEM Rules; and
- market power mitigation processes in the WEM Rules where a generator has market power and may have exploited that market power to raise prices above competitive levels.
Industry feedback is invited on this Directions Report. Submissions can be made at submissions@energy.wa.gov.au and are due by Friday 11 December 2020.
Submissions received will be published on this website following the closing date, unless a request for confidentiality is made.
