The National Electricity Market Review Implementation Taskforce (NEMRIT) shared a consultation paper on the draft regulatory package to implement the core recommendations of the NEM Wholesale Market Settings Review. This legislative package is important for the next stage of Australia's energy transition. It makes the Electricity Services Entry Mechanism (ESEM) a permanent part of the NEM and strengthens liquidity in the wholesale market and associated contract markets. This should give renewable energy, storage and firming projects the long-term revenue certainty they need to be bankable.
The CEC welcomes the core design and a nationally consistent mechanism but identifies a range of elements that need to be improved or further detailed, including:
The mandates of ESEM, and how they're defined in National Electricity Law should clearly reinforce existing markets, not replace them.
- Greater emphasis must be placed on the industry-led contract design process.
- Governance and discretion need tighter boundaries to give industry greater certainty that future changes won't devalue investment decisions.
- Transparency should be designed-in from the outset to give developers, investors and financiers confidence.
- Project delivery settings should prioritise readiness and deliverability.
- Long-duration storage needs require a clear pathway.
- Regulatory interventions must be proportionate and targeted.
- Early checkpoints are needed during establishment.
- A stable investment environment must be preserved while ESEM details are defined and implemented.
- Guideline-making powers and obligations should be defined in the NEL.
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