Treasurer Ben Wyatt's ambition for increased private participation in the electricity sector remains, despite a slow start, touting it as part of a microeconomic reform program designed to lift productivity.
![](https://static.businessnews.com.au/sites/all/themes/bn2020/images/squares.gif)
!['Monster' power reforms to boost growth: Wyatt](https://static.businessnews.com.au/sites/default/files/styles/medium_906x604/public/articles-2018-04/Ben-Wyatt-at-the-State-Budget-2017-media-lock-up-photo-Mogens-Johansen-07092017-110-1440.jpg?itok=6JEiDq_G)
Treasurer Ben Wyatt's ambition for increased private participation in the electricity sector remains despite a slow start, touting it as part of a microeconomic reform program designed to lift productivity.
Speaking to journalists after a Committee for Economic Development of Australia breakfast, Mr Wyatt said a ‘monster’ program was under way to review functioning of electricity markets.
The delay to the introduction of competition among electricity retailers had drawn criticism from shadow energy minister Dean Nalder earlier this year, with Mr Nalder saying it showed the government was appeasing unions.
Western Australia is the only state where private providers can't compete with the government in power retailing to consumers, a restriction increasingly under fire as new players in gas retail, a comparable market, drive down prices.
WA is also one of few states where the government still has control of a large portion of power generation assets, through Synergy in the south west network.
Synergy has a market share of about 50 per cent as a generator.
“Over time, (power) generation, in my view, is going to be the domain of the private sector,” Mr Wyatt said.
“They're willing to invest.
“You’re now starting to get a lot more creativity and innovation in that generation side (of the market) and I think over the next 10 to 20 years as older assets retire, there will be more of that.
“I expect, I’m hopeful that will be from the private sector.”
Mr Wyatt highlighted the Carnegie Clean Energy build of a 10-megawatt solar farm in Northam as an example of what private investors could bring to the table.
The project is merchant funded without a government power purchasing agreement to underpin it, he said.
Synergy has come under criticism from other players in the industry for its market dominance, including an investigation by the Economic Regulation Authority last year into the company’s pricing.
In 2017, Mr Wyatt committed to introduce competition among Synergy’s individual generation assets so that they would bid into the system separately.
That is being explored by the Public Utilities Office, which is also looking at changes to the rules that govern how new generators connect to the existing network, to reduce the costs required.
Another move that had been flagged under the previous state government, and is proceeding, was to remove about 400MW of excess capacity out of the south-west market.
In the north-west electricity market, there have been changes announced to broaden access and drive lower prices.
A privatisation of Western Power, moving the network to a national regulator, and usage of auctions for reserve capacity pricing have all either been delayed or nixed, however.
“Almost every utility and the regulatory arrangements that apply to them is under review and reform,” Mr Wyatt said.
“We’re looking at a range of other things, for example, the generation mix that we might need over the next 20 years, to encourage some early decisions around that.”
Mr Wyatt cited the recent deal between Synergy, CBus Super and foreign money manager Dutch Infrastructure Fund as an example of the progress the state government is making.
That was a pretty creative response to ensure Synergy could meet its renewable energy target obligations, he said.
He batted away criticism that the inclusion of CBus had been a sop to unions, saying DIF had brought the super fund to the table.
Broader agenda
Mr Wyatt cited the planned creation of Infrastructure Western Australia, changes to the rail access regime, a review of occupational licensing, and potential regulatory changes to allow for autonomous vehicles as examples of the government’s broader reform agenda.
The sustainable health review, which was announced last year and is expected to report in November, would provide an opportunity to drive better outcomes in that space, he said.
Smaller red tape reduction efforts were under way too, he said, an example being significant cuts to approval times for new aquaculture businesses and easier licenses for ecotourism companies.
All of this was key to improve productivity, he said, and diversify the state’s economy.
Productivity growth was fundamental for long term improvement in living standards, he said, even if people may find it boring.
“It’s this space that will have great long-term benefits,” Mr Wyatt said.