Australia Govt: Post-2025 energy market design

Energy Ministers have released the Energy Security Board’s (ESB) final advice for a post-2025 market design for the National Electricity Market (NEM).

After 2 years of consultation and in-depth analysis, the ESB has delivered its final advice. The advice includes recommendations across 4 reform pathways to:

strengthen signals for investment in dispatchable generation capacity. Retain existing generation as long as needed to keep the system reliable, affordable and secure.
deliver essential system services.
improve transmission and access arrangements to ensure consumers are the beneficiaries.
better enable demand side participation and the integration of distributed energy resources like rooftop solar.
The post-2025 reforms recommended by the ESB will support the continued delivery of affordable and reliable power. This will be supported by the right mix of technologies and value-for-money transmission.

The Hon Angus Taylor MP, Minister for Energy and Emissions Reduction, said, ‘While we have seen record levels of investment in renewable capacity, with 7000 MW added in 2020, we have not seen investment in the dispatchable capacity needed to support renewables and ensure a reliable and affordable grid.’

‘This is a significant concern, with large-scale replacement of thermal generators needed over the next decade and beyond as older power stations leave the market. To address this, one of the ESB’s most important recommendations is for detailed design work on a capacity mechanism to create a clear, long-term signal to invest in dispatchable generation in the future.’

Energy Ministers will meet in September to agree the final package of reforms which will be provided to National Cabinet for consideration in October.