Reform is underway to unlock long term investment in our national energy grid as it transitions away from ageing, unreliable coal, with the Albanese Government ensuring that a good deal for consumers remains central to this plan.
The National Electricity Market (NEM), which covers all of Australia except Western Australia and the Northern Territory, is one of the largest interconnected electricity networks in the world - supplying power to more than 23 million people every day.
However, as we transition away from ageing and expensive coal-fired power to cheap firmed renewables, including through the increase in homes and businesses taking up rooftop solar and batteries, reform is needed to ensure our modern grid is affordable and reliable.
The NEM Wholesale Market Settings Review, established in November 2024, is investigating how the market can be reformed to promote long term investment in firmed, renewable energy and storage, while also addressing price volatility and delivering more predictable, stable bills for consumers.
Chaired by Associate Professor of Economics at Griffith University Dr Tim Nelson, the review's draft report out today outlines several recommendations, including how government might support investment after the Capacity Investment Scheme (CIS) concludes in coming years.
Other recommendations address long standing barriers to new investment in electricity generation projects and improve the functioning of markets, to ensure consumers get the best services possible at lowest cost.
The Albanese Government, with the support of all NEM state and territory governments, previously responded to the need for accelerated investment in firmed renewables by delivering our reliable renewables plan and establishing the CIS.
Working alongside Associate Professor Nelson on the independent Review are former Australian Energy Regulator Chair Paula Conboy, respected energy expert Ava Hancock who helped design the NSW Energy Roadmap and former Boston Consulting Group Senior Partner and Energy Practices Lead Phil Hirschhorn.
The findings from the Review's draft report will now go to public consultation, with responses due by 17 September.
The independent Expert Panel Review is expected to deliver its final recommendations to Commonwealth, state and territory Energy Ministers by the end of 2025.
The Albanese Government will carefully consider the Expert Panel's final recommendations once delivered.
The draft report can be found on the DCCEEW website here : https://consult.dcceew.gov.au/nem-review-draft-report-consultation
Quotes attributable to Minister for Climate Change and Energy Chris Bowen:
"Australia has the world's best sun and wind to power our future.
"In our first term we did the urgent repair work needed to address a decade of energy market neglect which was leaving consumers too exposed to ageing, unreliable coal and international prices spikes.
"We've provided the certainty to get investment flowing, to secure the jobs we need now and into the future. We are working with the states and territories to deliver a better, fairer energy system that Australians deserve."
Quotes attributable to NEM Review Chair Associate Professor Tim Nelson:
"If we get the right market settings in place, we can deliver a secure, affordable, low-emissions electricity system that works better for everyone.
"Our draft report makes nine major recommendations aimed at re-establishing the NEM's core strengths: efficient markets to guide investment decisions, efficient dispatch, manage financial risk, and deliver the affordable and reliable energy consumers deserve and expect.
"We are confident that the pathway we've set out - one that strengthens markets, supports investment, and puts consumers first - is the right one."
