The Australian Energy Regulator (AER) today released its annual benchmarking reports for electricity distribution and transmission networks.
These reports analyse the productivity growth and efficiency of distribution network service providers (DNSPs) and transmission network service providers (TNSPs) individually, and as an industry, in the National Electricity Market (NEM).
Key findings in the report include:
In 2019 distribution industry productivity fell by one per cent and transmission industry productivity fell by 1.8 per cent. This follows productivity improvements over the past three years for distribution networks and the past two years for transmission networks. These reductions in 2019 are consistent with productivity decreases in the utilities sector and the Australian economy. Productivity growth since 2015 has been stronger across distribution and transmission networks than in the utilities sector or the Australian economy.
Of the 13 DNSPs, 7 became less productive in 2019, primarily due to higher operating expenditures and declining reliability. This was partly offset by the improved productivity of the remaining 6 DNSPs, primarily driven by lower operating expenditures.
Since 2006 there has been some convergence in the productivity levels of DNSPs and from 2012 the New South Wales and Australian Capital Territory DNSPs have been among the most improved in the NEM.
Of the 5 TNSPs, 2 experienced declining productivity in 2019 which was partly offset by productivity improvements of the remaining 3 TNSPs.
The benchmarking reports support the AER’s work in regulating electricity networks.