The Brisbane gas Short Term Trading Market (STTM), which commenced 1 December 2011, is another important step in improving overall gas market transparency and competition.  Trading will cover the Brisbane metropolitan gas market with participants including energy retailers, power generators and other large-scale gas users.

The STTM provides signals to the market on the nature and cost of supply or transmission constraints and encourages efficient contracting and investment in infrastructure to support further growth in the gas market. 

The STTM is a national initiative with operations in Sydney, Adelaide and now Brisbane. STTM operations are managed by the Australian Energy Market Operator (AEMO).

The design of the Brisbane STTM ´hub´ and associated amendments to the National Gas Rules were developed by AEMO in consultation with DEEDI, key industry stakeholders and other jurisdictions.

The STTM brings several important features to the Brisbane market including the creation of an open market with transparent pricing and a systematic approach to system balancing and security.

Some other features of the STTM are:

• Gas is traded a day ahead of the actual gas day, and the day-ahead price ('ex ante market price') is applied to all gas that is supplied according to the market schedules through the hub on the gas day. A market price is set each day at each hub for clearing all trades in the ex ante market.
• The market provides financial incentives for participants to keep to their schedules and, by doing so, provides financial drivers for keeping the gas supply system balanced. There is also provision in the regulations requiring trading participants to act in ´good faith´, consistent with the principles of the market.
• Bids and offers are scheduled on price to deliver the maximum benefit to the market as a whole.
• When required, the market ensures that firm shippers are compensated when non-firm, lower priced shippers use the capacity that they have funded.
• Mechanisms for balancing flows to and from the hub are part-and-parcel of the normal, daily operation of the market, and system security events are resolved systematically using a well-defined set of procedures.

Importantly, the STTM delivers these benefits without disrupting the current industry arrangements for gas supply.

Further information

• AEMO website
• Commonwealth Department of Resources, Energy and Tourism website

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