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Snowy hydro and market concentration

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journal contribution
posted on 2021-05-25, 02:08 authored by DYLAN MCCONNELLDYLAN MCCONNELL
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.

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