An independent review has recommended updating AEMO’s governance to ensure it remains fit for purpose now and in the future.
Energy Ministers commissioned Mr Nigel Ray PSM to lead the review of AEMO’s governance arrangements. Mr Ray has delivered his final report.
The review found AEMO plays a critical role in operating Australia’s energy markets. It is widely recognised as a world-class institution.
AEMO’s functions as an independent market body have expanded since its establishment in 2009, as Australia’s energy grid has also rapidly changed. Ministers considered it timely to review AEMO’s governance to ensure it remains fit for purpose in the context of the energy transition.
The review recommended updating and strengthening AEMO’s governance to:
- suit AEMO’s expanded and increasingly complex role in the energy transition
- improve accountability, transparency and responsiveness to governments.
The final report makes 14 recommendations. They seek to amend AEMO’s governance framework instead of adopting a new one. This allows similar outcomes to be achieved with less disruption.
The recommendations include:
- keeping AEMO’s current structure
- 100% government membership
- divesting AEMO’s subsidiary, AusEnergy Services Limited (ASL)
- reforms to board composition and appointments
- improved engagement with governments
- independent oversight of AEMO’s expenditure by the Australian Energy Regulator
- greater clarity around AEMO’s role in supporting national security.
Read the Energy Ministers’ response to the review’s recommendations: Review of AEMO Governance | energy.gov.au
