Energy market reforms on the horizon from Ministers' final meeting for 2025

“Australia’s future energy mix is changing, with over 40 per cent of our energy now supplied by renewable sources.

“The final Nelson Review report provides the national framework for wholesale energy market design that supports industry and investor confidence. We welcome the Electricity Services Entry Mechanism as a tool to replace the Capacity Investment Scheme (CIS) but note that the detailed design will require significant consultation to ensure that it supports an effective energy market”. 

“As the Australian Energy Market Operator (AEMO) and the CSIRO have now both reaffirmed in the last week, a diverse suite of renewables technologies, firmed by storage, is the lowest-cost option to meet Australia’s anticipated demand on the electricity grid, of all other options.

“Unlocking investment in new electricity market services and advancing spot market reforms are vital next steps to increasing the reliability and efficiency of our NEM. However, the importance of a unified, national approach to implementing these long-term market signals and planning for the future cannot be overstated.

“In addition, strong and enduring energy policy that delivers the services our system needs to support households and businesses’ growing energy needs is more critical than ever,” she said.

Among the recommendations contained in the Nelson Review report, the establishment of an Electricity System Entry Mechanism (ESEM) to supplant the Capacity Investment Scheme (CIS) in 2027, and a Market Making Obligation (MMO) have attracted in-principle support from industry.

The CEC has long advocated for the ESEM to be designed with transparency, cost-effectiveness and flexibility for newer technologies such as Long Duration Energy Storage, pumped hydro and offshore wind, at its core, to maximise its chances of success. 

In its joint submission to the Nelson Review co-authored with the Australian Energy Council, the CEC has also advocated for essential system services (ESS) to be elevated to the importance of shaping and firming services, and for the ESEM to procure ESS contracts alongside generation.

“It’s great to see that many of the recommendations the CEC has been calling for are being considered and we look forward continuing to engage with our members and Government on an effective plan to implement these reforms in order to deliver on the national energy transition,” Ms Trad said.

The agreement of Ministers to develop a National Technical Regulatory Framework, Consumer Energy Resources (CER) Data Management Framework, and national requirements for interoperability of devices, was also a major initiative arising from the ECMC’s final meeting for 2025.

Ministers also agreed to appoint the Clean Energy Regulator as the national technical regulator for CER market reform, in recognition of the agency’s fundamental role in coordinating the Federal Government’s successful Small-scale Renewable Energy Scheme and the strong compliance product and installer programs that underpin it.

“More and more consumers are installing rooftop solar and batteries in their homes and businesses. Harmonising the way our world-leading CER market operates across state and territory lines will similarly be a major task for our industry to accomplish,” Ms Trad said.

“The implementation of a national framework will drive least cost integration of these assets to the grid and greater simplicity for consumers to understand who is responsible for selling, installing, maintaining and operating them,” she said.

ENDS

For more information or to arrange an interview, please contact: 

Danielle Tricarico
Clean Energy Council General Manager - Media

Liam Straughan
Clean Energy Council Media Officer

+61 409 470 683