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Energy Services - Energy Services - 20152015

Which way to the future?

Jane McAloonDirector-General

NSW Ministry of Energy & Utilities

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20152015

Energy services to build

and sustain quality of life

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2015 - Energy Services2015 - Energy Services

Will be based around

health, prosperity,

the environment

and – tradeoffs.

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2015 - Energy Services2015 - Energy Services

Choices will be made by us all about the nature of energy services.

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2015 – Energy Choices2015 – Energy Choices

Energy Sources – what will they be and are they sustainable?

Tradeoffs - what are the impacts on the environment and how are they managed?

Customer loyalty & satisfaction - who supplies the services and how will they be costed?

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Global Energy TrendsGlobal Energy Trends

Global trends which are impacting on many countries’ energy industries include:

1. Commercialisation/privatisation2. Globalisation – specialisation and focus3. Competition and retail contestability4. Convergence of gas/electricity markets5. Energy Trading6. Environmental focus7. Regulation

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United States – Gas United States – Gas MarketMarket

Trends Past Decade Next Decade

Exploration & Production

Rationalisation and focus Shift back to growth

Transmission & Storage

Consolidation & growth Integration into midstream energy networks

W/sale Trading Robust trading & forward financial markets

Ongoing growth in size & complexity

Energy Distribution

Consolidation precedes deregulation Multi-regional utilities – unbundling & outsourcing

Retail Energy Large customers have choice – retail market is slow to develop – experimentation

Choice linked with IT – convergence beyond energy

Customer Interface

Hundreds of marketers – information and choice expand

IT and internet redefine relationship

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United KingdomUnited Kingdom

Retail is the area where competition is having the greatest impact

Utilities Act was passed in 2000 which provided a new regulatory framework for bringing gas & electricity markets in line

To ensure customer service, consumer protection has become primary focus of energy policy & regulation

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2015 – Australian 2015 – Australian energy production by energy production by

fuelfuelPRODUCTIONSource – ANZMEC Energy Trends 2001

1997/8

(PJ/%)

2014/15

(PJ/%)

Black Coal 5885 (48%) 8066 (43%)

Natural Gas 1272 (11%) 3038 (16%)

Uranium 2724 (22%) 5640 (30%)

Renewables 284 (2%) 319 (1.7%)

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2015 – Australian 2015 – Australian energy consumption by energy consumption by

fuelfuelCONSUMPTION

Source – ANZMEC Energy Trends, 2001

1997/98

(PJ/%)

2014/15 (PJ/%)

Black and Brown Coal 2000 (42%) 1970 (33%)

Crude Oil 1640 (34%) 2040 (34%)

Natural Gas 861 (18%) 1760 (29%)

Renewables 284 (6%) 319 (5%)

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Challenges – NSW GasChallenges – NSW Gas

1. Changing energy market dynamics after 1/1/02 particularly with new entrants

2. Appropriate regulatory framework which supports dynamic national energy markets – globalisation

3. Meeting and managing customer expectations – convergence in energy services – reasonably priced with reliable service - policy objectives are clear & transparent

4. New market opportunities – emissions trading & environmental concerns – focus on gas

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ConclusionConclusion

Keep an eye to the future today.