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Snowy hydro and market concentration
Questions on notice, submitted to Senate Economics Legislation Committee inquiry into Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019.
Summary
Snowy hydro currently has a dominant position in the peak generation and the related cap contract market segment of the National Electricity Market (NEM). When analysing peaking generation capacity, this becomes readily apparent.
• Two thirds of the peaking generation capacity in NSW, and half of the peak generation capacity in Victoria is currently owned by Snowy Hydro.
• This is an exceedingly concentrated market in both NSW and Victoria, according to common metrics.
• Assuming “Snowy 2.0” is completed, the market share will be further increased,and the degree of concentration will become untenable.
Summary
Snowy hydro currently has a dominant position in the peak generation and the related cap contract market segment of the National Electricity Market (NEM). When analysing peaking generation capacity, this becomes readily apparent.
• Two thirds of the peaking generation capacity in NSW, and half of the peak generation capacity in Victoria is currently owned by Snowy Hydro.
• This is an exceedingly concentrated market in both NSW and Victoria, according to common metrics.
• Assuming “Snowy 2.0” is completed, the market share will be further increased,and the degree of concentration will become untenable.
