Oz Blog News Commentary

Years too late, the ACCC recognises the failure of the NEM

July 11, 2018 - 16:57 -- Admin

The latest ACCC report on the National Electricity Market is an incoherent mess, reflecting the breakdown of the neoliberal/market liberal assumptions on which both the ACCC and the NEM are founded. But I can at least endorse this statement

There are many causes of the current problems in the electricity market. At all stages of the supply
chain decisions have been made over many years by many governments that set the NEM on the
wrong course.

As I said in a report to the Electrical Trades Union in 2014

The National Electricity Market was implemented in the context of National Competition Policy and at a time when faith in competitive markets was at its peak. The [resulting’ design flaws  have led, over 20 years, to the failure of the NEM … These failures are not accidental. Rather they can be explained by fundamental and incurable flaws in the NEM model of pricing, regulation and incentives for investment. Marginal adjustments such as those being proposed at present will inevitably prove inadequate.

Back then, as I recall, the idea of that the NEM was a failure was not so popular. Rather, the only obstacle to complete success was said to be the remnants of public ownership in NSW and Queensland.