Electricity Market Reforms: Market redesign for 2025

02.09.2021

National Cabinet has agreed to the recommended reforms by the Energy Security Board (ESB) to the national electricity market (NEM). We provide a summary of what the ESB recommended. Plus insights on implications for owners and operators of electricity assets and investors.

On 1 October 2020, National Cabinet discussed and agreed to the recommendations made by the Energy Security Board (ESB). They also endorsed the design principles for further development of a capacity mechanism agreed by Energy Ministers. The ESB sought input from stakeholders for a sustainable energy system in Australia. Reforms support an orderly transition to a modern energy system and see an energy system that can deliver affordable, smart and clean energy to consumers.

Our energy team has reviewed the package of reforms put forward by the ESB across the 4 areas in need of reform:

Resource adequacy through transition
Essential services, scheduling and ahead mechanisms
Integration of DER and flexible demand
Transmission and access

Read on for our summary on how the electricity market is set to evolve. And the interplay between the Energy Security Board, the Australian Energy Market Commission (AEMC), the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) to progress the reforms with governments for national electricity rules.