Market power and the problem of security of supply in the National Electricity Market

The supply of electricity is an important service to any economy, both as an input to the production of goods and services and also as a final consumer good. In Australia in 1998/1999 annual revenue of the electricity industry was approximately $23,168m and the industry employed 32,700 people (Australian Bureau of Statistics cat. no. 8226.0). Electricity consumption has grown steadily over the past 10 years in Australia and has tended to grow slightly faster than real GDP (see Table 1). At the same time that this steady growth has occurred the industry has been through a process of considerable reform and restructuring. This process has mirrored that that has occurred in a number of other OECD countries (Steiner, 2000). [Introduction