The Coordinator’s obligation
Under clause 2.16.13D of the Electricity System and Market Rules (ESM Rules) the Coordinator of Energy (Coordinator) is required to provide the Minister for Energy (Minister) with a report addressing the matters under clause 2.16.13A and 2.16.13B of the ESM Rules at least once every three years.
The first report was due by 1 July 2025.
Clauses 2.16.13A and 2.16.13B of the ESM Rules provide that the Coordinator must monitor:
- market design problems and inefficiencies;
- the effectiveness of the compliance monitoring and enforcement measures in the ESM Rules and Regulations, including but not limited to:
- the effectiveness of the Economic Regulation Authority’s (ERA’s) surveillance activities under sections 2.16A to 2.16D; and
- appropriateness of the parameters for determining a Material Portfolio and Material Constrained Portfolio under clauses 2.16C.1 and 2.16C.2; and
- the effectiveness of the Australian Energy Market Operator (AEMO) in carrying out its functions under the Regulations, the ESM Rules and WEM Procedures;
- the effectiveness of the Network Operators in carrying out their functions under the ESM Rules and WEM Procedures; and
- the efficiency and effectiveness of the methodologies for determining: the Market Price Limits and the Benchmark Reserve Capacity Price.
Clauses 2.16.13E requires the report to include:
- market trends; and
- any recommended measures to increase the effectiveness of the market in meeting the State Electricity Objective to be considered by the Minister.
2025 WEM Operation Effectiveness Report
The Coordinator of Energy provided the WEM Operation Effectiveness Report, that covered matters outlined in clauses 2.16.13A, 2.16.13B and 2.16.13E of the ESM Rules, to the Minister on 25 June 2025.
On 8 July 2025, the Coordinator, after consultation with the Minister, published a version of the report which has confidential or sensitive data aggregated or removed.
The report outlines several recommendations relating to two key proposals for improving the effectiveness in the WEM:
- integrating the State Electricity Objective more effectively within the Rules; and
- improving transparency within the WEM to facilitate efficient market outcomes.
A key theme that has emerged during the preparation of this report is the need for greater transparency, including from the market bodies in performing their functions under the ESM Rules, to provide current and prospective participants with the complete information they require to make operational and investment decisions.
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