The Albanese Government has commenced a review into how Australia's largest electricity grid and market will operate in the coming decades, to keep costs low for households and business while better managing the rapid increase and integration of rooftop solar and utility scale reliable renewables.
An expert independent panel, led by Associate Professor Tim Nelson, with Paula Conboy, Ava Hancock and Philip Hirschhorn, will undertake widespread consultation and make its final recommendations to Energy and Climate Ministers in late 2025.
The panel will look at National Energy Market (NEM) wholesale market settings to ensure the market promotes investment in firmed renewable energy generation and storage capacity into the 2030s and beyond. This is vital as electricity demand grows and ageing coal fired power stations exit the system.
The NEM is one of the world's largest interconnected networks with around 40,000 km of transmission lines and cables and supplying electricity to more than 23 million people.
It covers all states and territories apart from Western Australia and the Northern Territory and was originally designed to support a baseload power grid predominantly fuelled by coal generators.
A review has become increasingly important to ensure the right settings are in place to meet increasing demand for electricity, and to support a smooth transition to reliable renewables as aging coal fired power stations are retired from the system.
The Commonwealth, with the support of NEM state and territory governments previously responded to the need for accelerated investment in firmed renewables by introducing the Capacity Investment Scheme (CIS), which will deliver almost half as much capacity again in clean, cheap, reliable renewables and storage, as is in the current NEM, by 2030.
State and territory governments and energy market bodies were consulted on the review's terms of reference, which are available at the NEM Wholesale Market Settings Review page on DCCEEW's website.
Comments from Minister for Climate Change and Energy, Chris Bowen:
"The Albanese Government implemented a reformed Capacity Investment Scheme in 2023, and it has massively outperformed to date, which is a good thing and shows the investment appetite to deliver reliable renewables in Australia is very strong.
"The review will provide a comprehensive assessment of what the market will need next, once the current CIS tenders end in 2027, to ensure that investment pipeline remains strong.
"During its decade of delay and denial, the Coalition made no attempt to address the foreshadowed closure of 90 per cent of Australia's coal fleet. They continue to ignore reality in calling for these increasingly unreliable generators to be kept open longer than planned, as their only solution to meet Australia's growing energy needs for the next 15 years or more.
"We're doing the work now to ensure our grid will be stable and there will be enough clean, cheap, reliable renewable generation and storage to power Australia's needs."
About the Panelists
Associate Professor Tim Nelson is a leading public figure in energy markets with experience across academia, government, and industry. He is an Associate Professor of Economics at Griffith University and has held a range of senior roles with Iberdrola, a renewable energy developer, AGL, and the Australian Energy Markets Commission.
Paula Conboy has 25 years' experience in energy market regulation and is the former Chair of the Australian Energy Regulator. Ms Conboy brings a wealth of experience including from the international context.
Ava Hancock brings expertise in electricity market policy and has strong experience in renewable energy project development. Ms Hancock played a pivotal role in design of the NSW Energy Roadmap.
Phil Hirschhorn was a Boston Consulting Group Senior Partner advising Australian energy businesses and government agencies and completed a BCG Henderson Institute Fellowship, researching electricity markets.
