Analysis

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Regulated Electricity Prices: A look at network and wholesale costs

Retail costs have recently received much attention in the draft regulated Default Market Offer, but network and wholesale costs have also risen. These two components make up the bulk of the final bill, accounting for 33-48 per cent (network) and 31-44 per cent (wholesale) of DMO 7 draft prices. As the energy transition progresses with new network investments and the shift to renewables, storage, and gas, these costs will require closer focus. Last week, we explored retail costs; this week, we examine the network and wholesale cost components.

BY Australian Energy Council Mar 27 2025

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Electricity Prices: Are Retail Costs the Real Issue?

Retail costs have been in the news following the release of the Australian Energy Regulator’s draft default market offer decision. This is despite retail costs being dwarfed by network and wholesale costs that make up 33-48 per cent and 31-44 per cent of the DMO 7 draft prices respectively. According to new analysis, increases in the DMO regions have been largely driven by rises in those two largest components. These are supply chain costs retailers cannot fully control and pass through to end users, so why the intense focus on retail costs? We take a look.

BY Australian Energy Council Mar 20 2025

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Wholesale Market Settings Review – Key Issues to Resolve

The Australian Energy Council continues to engage with the Expert Panel conducting the wholesale market settings review. Submissions closed on 14 February. The Review is an important piece of work, as it seeks to define the services the energy system will need as the transition continues and to ensure that market-based incentives and signals deliver the required investment, enabling a shift away from a continued reliance on Government intervention. What is emerging is good alignment across stakeholders on the key issues. We take a closer look at some of the common themes and what the AEC believes are key areas.

BY David Feeney Mar 13 2025

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Australia's Solar Waste: A Growing Problem

Australia has long been a global leader in the adoption of solar energy, with one of the highest per capita rates of rooftop solar installations worldwide. Solar power has become a cornerstone in the nation's commitment to sustainability, contributing significantly to reducing its carbon footprint and reliance on fossil fuels. However, as solar panels reach the end of their lifespan, the issue of solar panel waste is rapidly emerging as a significant environmental challenge that could escalate in the coming decades. We take a closer look.

BY Tom Monaghan Mar 06 2025

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Western Australia Goes to the Polls: What’s in Store for Energy?

As early voting opened ahead of Western Australia’s 8 March state poll energy issues and proposals continued to make headlines. In particular, the ALP’s announcement that if re-elected it would provide generous support to households to install battery storage was prominent There have also been questions raised about whether a re-elected ALP government would be successful in its energy transformation to allow the phasing out of state-owned coal plants by 2030. In contrast the Liberal Party has pledged to maintain and extend the state’s coal plants until more gas generation can be brought into the system. The Nationals have announced support for microgrids and more stringent approval processes for renewable energy projects, while the Greens are promoting a 10 per cent Clean Energy Transition Levy on onshore gas projects. We take a look at the key energy policies presented to voters.

BY Carl Kitchen & Tom Monaghan Feb 27 2025

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Navigating Energy Consumer Reforms: What is the impact?

Both the Essential Services Commission (ESC) and Australian Energy Market Commission have recently unveiled consultation papers outlining reforms intended to alleviate the financial burden on energy consumers and further strengthen customer protections. These proposals range from bill crediting mechanisms, additional protections for customers on legacy contracts to the removal of additional fees and charges. We take a closer look at the reforms currently under consultation, examining how they might work in practice and the potential impact on consumers.

BY Braeden Keen Feb 20 2025

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Is time running out for new generation in WA?

As Western Australia edges towards its next State Election in March, the energy sector continues to be a hot button topic. Already this year, the South West Interconnected System (SWIS) has been forced to navigate record peak demand and highest demand days, a massive test for operators and market participants who successfully dealt with the challenge. Despite this resilience, the timely delivery of new generation will be critical to address the forecast capacity shortfall by the end of the decade and ensure a reliable and affordable system for industry and consumers. Removing the bottlenecks preventing new generation from connecting to the grid in a timely manner will be crucial. Here we take a look at the challenges of delivering new projects in WA and cast a spotlight on some of the issues that still need to be addressed.

BY Graham Pearson Feb 13 2025

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Wholesale Market Settings Review – A Shared Vision Is Required

The Federal Government’s review into the National Electricity Market (NEM) wholesale market settings is a crucial step in ensuring reliable energy supply as coal-fired generation phases out and renewables become the dominant energy source. With energy markets worldwide facing the challenge of balancing low-emissions, low-cost generation with the need for firmed energy supply, this review must identify reforms that incentivise investment in flexible, dispatchable generation sources. So, what will be needed in order for this review to succeed? We take a closer look.

BY Louisa Kinnear Feb 06 2025

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Australia’s net zero plan is looking a lot like an electricity-only plan

The past three years have seen a stronger commitment to encouraging economy-wide decarbonisation, as seen through reforms to the Safeguard Mechanism and new policies like the New Vehicle Efficiency Standard and Future Made in Australia. But the release of two emissions reduction progress reports paints a sobering reality – no sector other than electricity is doing anything to help Australia meet its 2030 target. Is this leading to the proverbial “all eggs in one basket”? Or is electricity decarbonisation really the only viable pathway to 43 per cent by 2030? We take a closer look.

BY Rhys Thomas Dec 12 2024

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Tackling growing costs of energy reforms

The Australian Energy Market Operator (AEMO) recently submitted a rule change proposal in Western Australia to amend the way its budget is set. The changes would have resulted in a shift from a fully regulated model to a NEM-like unregulated approach. Stakeholders raised concerns the proposed rule change would reduce transparency and accountability, and Energy Policy WA rejected the proposal last week. At the same time AEMO lodged its rule change proposal, the Australian Energy Council engaged Rennie Advisory to identify the root causes for what have become AEMO’s unpredictable and steadily rising costs. Here we take a look at AEMO’s rule change proposal, the issues identified by Rennie Advisory and some options that could be considered.

BY Graham Pearson Dec 12 2024

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Getting innovation into the system: A retail perspective

In recent years, the energy landscape in Australia has undergone significant transformation, driven by digitisation and the increasing use of smart technologies. Where previously customers only had the choice of ‘who’ sold them energy and at what price, they can now increasingly ask ‘how’ they want their energy. This shift is empowering consumers to take a more active role in managing their energy consumption and costs, thanks to innovative products and services offered by retailers. From smart meters to virtual power plants and tailored tariff structures, energy providers are embracing new technologies. We take a look at where retailers have been delivering innovation and some regulatory barriers that can slow it down.

BY Braeden Keen Dec 05 2024

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Frontier Economics and the cost of the transition: How does it stack up?

Nearly two weeks ago, headlines revealed Australia’s energy transition would be more expensive than previously estimated. This news stemmed from modelling by Frontier Economics, which highlighted long-term costs beyond the commonly cited net present value figure of $122 billion in capital cost, as outlined in the Australian Energy Market Operator’s (AEMO) 2024 Integrated System Plan (ISP). We took a closer look.

BY Australian Energy Council Nov 28 2024

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ISP NEM 2040 Model with VRE drought – will it be reliable?

We recently published an article on the 20-27 May 2024 Variable Renewable Energy (VRE) drought and applied it to AEMO’s 2024 Integrated System Plan (ISP) eight-day renewable drought in 2040 scenario for the National Electricity Market, excluding Queensland. Our conclusion was that the 2024 ISP VRE drought scenario does not transparently or rigorously demonstrate how the grid would perform in a VRE drought. Our concern was that when we modelled a 2040 VRE drought, we could see significant amounts of load shedding even with some simplifying assumptions made for hydro and gas-powered generation (GPG) output. Stress testing how the energy system will cope with VRE droughts well ahead of time is an important task, and the AEC has devoted significant time to developing an internal model.

BY Peter Brook Nov 28 2024

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The changing shape of US grid investments

As the United States ponders the implications of a new Trump Administration on energy and climate policy, the US Energy Information Administration (EIA) has released a snapshot of grid investments over the past two decades. The data highlights that major energy companies are now spending more annually on delivery of power to homes and businesses than on the production of electricity. We take a look.

BY Australian Energy Council Nov 21 2024

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The return of Trump: What does it mean for Australia’s 2035 target?

Donald Trump’s decisive election win has given him a mandate to enact sweeping policy changes, including in the energy sector, potentially altering the US’s energy landscape. His proposals, which include halting offshore wind projects, withdrawing the US from the Paris Climate Agreement and dismantling the Inflation Reduction Act (IRA), could have a knock-on effect across the globe, as countries try to navigate a path towards net zero. So, what are his policies, and what do they mean for Australia’s own emission reduction targets? We take a look.

BY Rhys Thomas & Tom Monaghan Nov 14 2024

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The demographics behind the Top 5 solar postcodes

More than a third of Australian households now have solar installed, making it the largest generation source, ahead of coal plants. While all parts of Australia has seen growth in solar installations, in our latest Solar Report we highlighted the leading postcodes in terms of installations this year to date. Here we take a look at the demographics behind the suburbs in Victoria, New South Wales and Queensland based on the most recent census.

BY Carl Kitchen Nov 14 2024

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Queensland’s New Government: An Energy Policy Pivot

After Queensland's recent election, the Liberal National Party (LNP), led by David Crisafulli, is set to shift Queensland’s energy plan to one that prioritises affordability, reliability, and coal continuity over ambitious renewable targets. This shift from the previous government's approach aims to balance immediate cost control with stability, though it may challenge Australia's broader renewable energy goals. So, what policies does the new LNP government plan to implement, and what challenges may they encounter? We take a look.

BY Tom Monaghan Oct 31 2024

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1.5 Degree C aligned – what does it actually look like?

Earlier this month, the CSIRO published economy-wide modelling looking at how each sector in Australia could transition to a 2oC and 1.5oC aligned world respectively. With mandatory climate disclosure laws kicking in next year, which will see companies required to assess how their businesses fit in a 1.5oC aligned future, this modelling is illustrative of some of the opportunities and challenges that lie ahead. Here we take a closer look at the 1.5oC scenario, with a particular focus on what it means for the electricity generation sector. Read more.

BY Rhys Thomas Oct 31 2024

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International Energy Summit: The State of the Global Energy Transition

Australian Energy Council CEO Louisa Kinnear and the Energy Networks Australia CEO and Chair, Dom van den Berg and John Cleland recently attended the International Electricity Summit. Held every 18 months, the Summit brings together leaders from across the globe to share updates on energy markets around the world and the opportunities and challenges being faced as the world collectively transitions to net zero. We take a look at what was discussed.

BY Louisa Kinnear Oct 24 2024

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May 2024 Variable Renewable Energy Drought and the ISP in 2040

Recently we published an article on the 20-27 May 2024 Variable Renewable Energy (VRE) drought estimating the hourly capacity factors of utility scale wind and solar by NEM region. The severity of this drought on wind generation particularly in NSW, Victoria and SA invited the question as to how the future grid would perform under the same conditions when gas powered generation (GPG) and hydro are the only genuinely dispatchable sources of electricity. We took a closer look.

BY Peter Brook Oct 24 2024

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