The Government has to look at the structural issues surrounding Synergy, that’s the major driver of costs in the Western Australian electricity system.
“The Government has to look at the structural issues surrounding Synergy that’s the major driver of costs in the Western Australian electricity system,” he said.
Richard Wilson from EnerNOC, an energy intelligence software provider, said Synergy’s dominance in the market and high fuel costs were the major drivers.
The review found a lack of competition in the market, high fuel costs and excess generation capacity to be the key drivers.
“Inefficient costs are mostly explained by Synergy’s structural issues in the market, some of the long term take or pay contracts that were signed many years ago that are now under water,” Mr Wilson said.
“The capacity market [is a] comparatively minor driver of costs in the system,” he said.
But some industry players argue the capacity market is not a major cause of high power prices.
A proposed shake-up of Western Australia‘s electricity market would see household bills reduced by passing the cost of investing on to producers.
“This has been a strongly growing market in the past and they’ve forecast high levels of growth and they’ve gone out and procured capacity to meet those high levels.
“Any changes to the capacity market needs to be looked at very carefully, there are a number of private participants that have invested in good faith in this market,” he said.
The Government last week released details of a review of the system, revealing electricity costs in WA are the highest in the nation.
Read more here: ABC