The head of TruEnergy has argued that productivity gains from the launch of the national electricity market have been lost due to the poor performance of the electricity network.
"The [national electricity market] should have boosted productivity levels by allowing more efficient use of generation and network capacity," Mr Richard McIndoe, TruEnergy's managing director, told a conference.
"We have seen this in the wholesale energy market with prices at the same levels as 15 years ago. But from a network perspective, [increased peak demand and higher network spending] have out-weighed the gains from the [national electricity market] structure"
According to McIndoe, the need for heavy investment in so-called 'peaking generators' and the network to match demand for a small number of days each year has reduced the overall efficiency of the electricity system.
"[The] lack of signals for efficient investment has heightened the trend," he said. "So we have seen an over-investment for that 1-2 per cent of the time when there is peak demand and an inefficient duplication of cost to back-up renewables."
Further efficiencies will come from removing price controls, he said, which has only occurred in Victoria.
Recently, a review of the level of market competition has been launched in NSW, which may see price controls removed from later in 2013.
Speaking at the same conference, the chairman of the Australian Competition and Consumer Commission, Mr Rod Sims, said privatising the state-owned power transmission networks will help lift efficiencies.
"Perhaps clearer more commercially disciplined governance and internal expenditure review processes would have assisted in preventing some of the recent significant price increases," Mr Sims said, when referring to the role of privately owned companies in achieving lower prices than publicly owned group.
He also called for more focus on so-called 'demand management', where power demand is reduced as prices rise, which helps to limit the need for building new generator and transmission capacity which is used for only a few hours in the middle of summer and winter, each year.
Mr Sims also reiterated his call for the NSW government to break up the large government owned generators such as Macquarie Generation, to help take pressure off wholesale power prices.