Australian NEM

IES and many of its staff have been involved in the NEM prior to and since its development, with many of IES staff having been involved in its development and operation. Experience IES brings in relation to the NEM includes market studies on a wide variety of issues to a wide variety of clients, market rules development, regulatory advice and analysis, modelling electricity markets and use of modelling software, and training in a broad range of matters.  
 
The broad range of experience derives from many of our senior people having held senior positions in Australian utilities (such as the former SECV, VENCorp, Snowy Hydro, Hydro Tasmania, Energy 21, Powergen and other organisations) and the vast variety of assignments concerning the NEM undertaken by IES. Examples of work undertaken by IES include development of the ancillary service arrangements in the NEM, NEM modelling and projections, assessing the economics of proposed new generation and transmission assets in the NEM, advice in M&A work and evaluating trading policies in the NEM, market dispatch and pricing system audits for the former NEMMCO, broad energy sector modelling, and general advice to Australian regulators and government.  
 
IES is the leading supplier of market simulation modelling capability in the NEM. IES sells the PROPHET simulation model and supporting databases which are used by the AEMO, many of the TNSP’s, generators and retailers. A key application of the model, as used by IES and others, is to assess future marker developments, price outcomes and asset values. 
 
IES has also developed and uses an integrated model of the Australian electricity and gas systems. This model produces “least cost” economic solutions through use of the MARKAL framework. While IES does not commercialise this model it has been widely used by IES in work that considers the influence of policy on the integrated development of the electricity and gas systems. 
 
Examples of work IES and IES consultants have undertaken in the NEM include:
  • IES has undertaken numerous Mergers and Acquisition work over many years. This has involved work for both the buyer and seller sides on all the types of plant in the market (based load coal generation, intermediate and peaking gas generation, hydro generation, wind generation, transmission etc. Examples of this are:
    • Adviser to the Victorian Government on market power issues and the value of Southern Hydro Ltd;
    • Advisor to companies such as TXU, Babcock & Brown, China Light & Power, International Power, Powergen, Stanwell and many banks that have operated in the market;
  • IES has undertaken numerous studies on NEM issues. Recent work includes:
    • A large study for the National Generators Forum on the transition path to a lower carbon economy;
    • Studies for AEMO associated with the development of the 2010 National Transmission Network Develop Plan (NTNDP);
  • IES has undertaken many studies on the development and projection of renewable energy prices. Recent work includes:
    • A study for the Clean Energy Council (CEC) on the proposed expanded MRET rules and their consequences;
    • A study for the Office of the Renewable Energy Regulator (ORER) on the reasons for the decrease in REC process in early 2010;
    • Many studies for clients on the RET and projected REC prices.
  • IES has undertaken studies to support regulatory work.  This includes:
    • A comprehensive study into metering strategies and the requirements associated with the last tranche of retail deregulation in the Australian electricity market;
    • Study for the AEMC on the impact of regulatory frameworks on transmission investment;
    • Market power consequences of various arrangements. 
  • IES has been central to the reforms undertaken in the Victorian and national markets:
    • From late 1993, IES was part of the core team that implemented the Victorian electricity industry reforms including market rules, vesting contracts, risk assessment. IES also undertook studies on the need for interval metering and working of the capacity elements of the market;
    • A current senior IES staff member was involved in writing Chapter 3 of the National Electricity Code (which covers matters concerned with market spot price and dispatch rules). IES was also the lead consultant in the development of the ancillary services arrangements in the NEM;
    • IES has provided training to a number of clients. This includes familiarisation of the NEM, advanced trading in the energy and reserve markets, linear programming applications, and modelling the NEM.  

 
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