Research on Australian Gas Market

Running Head: AUSTRALIAN GAS MARKET
Research on Australian Gas Market
Name of the student:
Name of the university:
Author Note:

1AUSTRALIAN GAS MARKET
Answer of Question 1:
Four bodies mainly Australian Energy Market Commission (AEMC), Council of
Australian Governments (COAG), Australian Energy Market Operator (AEMO) and Australian
Energy Regulator (AER) govern the gas market in Australia. Australian Energy Regulator is the
governing body that supervise gas markets in the north, east and west of Australia. To solve the
issues of gas market, the Gas Market Reform Group was established. Additionally the Australian
Energy Market Operator (AEMO) informs the Energy Council about the state of gas market in
Australia (Hülsmann, 2015). The gas price is fluctuating at a high rate in Australia. Therefore,
the Australian government is taking required action to keep the price of gas fixed in the market.
This is done by ensuring that there is no shortage of gas in the domestic market. The government
has the power to stop the export of gases if it is found that this will create shortage in the
domestic market. The decision of whether to export gas lies on the Commonwealth Minister of
Resources in Northern Australia. The Ministers relies on the report provided by AEMO.
To maintain the competitiveness, transparency and long-term security of gas supply the
Australian government has provided $2.5 million in 2018 – 2019 budget along with providing
$90 million in 2017 – 2018 budget (Haslam Mckenzie, 2013). The money will be used by the gas
market in Australia to improve operations in the gas market and maintain a constant generation
of energy.
Business and private customers are being served by AGL services in Australia. The
number of segments in which the company operates are four and they are group operations,
investment segments, wholesale and customer markets. AGL is being significantly affected by
the purchasing power of business and private customers. The decision of AGL to shift to

2AUSTRALIAN GAS MARKET
sustainable procurement process has a positive impact on its customers. Increasing number of
customers are purchasing energy from AGL keeping in mind the adverse effects of
environmental changes that might occur due to the use of non- sustainable procurement
processes. The resources that AGL has been using are non-renewable. However, if they shift to
renewable sources for the production of energy then their customers will change accordingly.
Now their customers and suppliers will deliver them solar energy, wind energy and the other
forms of renewable energy in the future.
Answer of Question 2:
AGL has a special code of conduct that the suppliers maintain while conducting business
with AGL. The Code of Conduct covers various policies like labour policies, risk management,
supply chain policies as well as environmental management and so on. The gas company has
developed a new procurement strategy to ensure that all parts of business that procure goods and
services do so by maintaining sustainable procurement (George et al., 2016). This will help AGL
to manage supplier risks and processes of supplier selection. All AGL suppliers should abide by
the rules and regulations mentioned in the Supplier’s Code of Conduct. The suppliers also need
to complete the questionnaires that are mentioned in the code of conduct. New suppliers those
are identified as risk suppliers are also required to complete the questionnaires and submit the
same to AGL. The information will be required to perform a risk analysis on the suppliers of
AGL, which will help the company to decide the best among the available suppliers. For this
purpose, AGL provides templates to all the new suppliers that engage in some new contract with
them. The risk suppliers are identified and accordingly actions are taken. AGL should follow the
given below sustainable procurement policies: