The Australian energy market has continued to see large investments in its reserves of gas and coal, with LNG projects taking the forefront of investments.
Australia is endowed with abundant, high quality and diverse renewable and non-renewable energy resources, including coal, gas, uranium, wind and solar.
According to a recent market report, 'Australia Energy Report,' one of the key investments in recent years has been BG Group and CNOOC reaching a Heads of Agreement in late 2012 that will see CNOOC increase its stake in the first LNG train to 50% and acquire 25% of BG Group's stake in fields in the Surat and Bowen Basins in Queensland.
The Australian energy industry is barely recognisable from that which operated in the 1990s. Regulatory barriers to interstate trade have been removed. There are regimes for third party access to the services of energy infrastructure.
The old public monopolies have been split up. Where a single government-owned business used to generate, transport and sell electricity, there are now competing generators and retailers. Specialist businesses run the transmission (long distance) and distribution (local area) networks that transport electricity to customers.
The energy industry is a significant contributor to the Australian economy, accounting for around 5 per cent of total industry value added in 2009-10.
Earnings from energy exports were approximately $70 billion in 2010-11, accounting for 33 per cent of the total value of Australia's commodity exports. Coal is Australia's largest energy export earner, followed by crude oil and liquefied natural gas (LNG).
Most of Australia's electricity is produced using coal, which accounted for about 75 per cent of total electricity generation in 2009-10. Gas accounted for about 15 per cent of electricity generation and renewable energy sources accounted for around 8 per cent.
The rise in electricity demand is expected to continue. With electricity prices determined by supply and demand, prices are extremely volatile.
For more information on the Australian energy market, see the latest research: Australian Energy Market
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