National Energy Market Review to Track Progress of Net Zero Transition

The review will determine what more needs to be done to attract investment into renewable projects.

A Hyundai KONA Electric charges at a EV charge station in Sydney, Australia, on Jan. 19, 2021. Brendon Thorne/Getty Images

The Albanese Labor government has launched a review of Australia’s electricity grid and market to ensure affordability for households and businesses.

This independent review, led by a panel of experts, will look into the integration of rooftop solar and large-scale renewable energy sources before delivering recommendations to the energy minister by late 2025.

The independent review panel includes Associate Professor Tim Nelson, an expert in energy markets, Paula Conboy, former chair of the Australian Energy Regulator, Ava Hancock, who helped design the NSW Energy Roadmap, and Phil Hirschhorn, a former senior partner at Boston Consulting Group.

Review NEM’s Scope and Objectives

The review will examine the National Energy Market (NEM) to see if it attracts investment for renewable energy systems.

“The review will provide a comprehensive assessment of what the market will need next, once the current CIS [Capacity Investment Scheme] tenders end in 2027, to ensure that the investment pipeline remains strong,” said Energy Minister Chris Bowen, in a statement.

The NEM, one of the world’s most extensive interconnected electricity grids, spans 40,000 kilometres of transmission infrastructure over the Australian landmass, and supplies electricity to over 23 million individuals.

Originally designed to support a baseload grid dominated by coal, the system now faces the challenge of integrating clean, reliable renewable energy.

“We’re doing the work now to ensure our grid will be stable, and there will be enough clean, cheap, reliable renewable generation and storage to power Australia’s needs,” Bowen said.

Energy Debate Heats Up in Parliament

The review comes amidst political contention, with opposition figures criticising the Albanese government’s energy policies.

During Question Time on Nov. 25, Deputy Opposition Leader Sussan Ley pressed Prime Minister Anthony Albanese over delays in announcing the 2035 emission reduction target, accusing the government of secrecy and potential harm to families’ energy costs.

Paul Fletcher, the Manager of Opposition Business, also criticised the government for rising emissions under Labor’s tenure.

“How does the prime minister expect Australians to take this government seriously on climate action?” he asked.

Albanese defended Labor’s achievements, highlighting legislation that enshrined emissions targets for 2030, and net-zero by 2050.

He said these targets, based on advice from the Climate Change Authority were grounded in science, and were passed by Parliament despite opposition resistance.

He also pointed to global energy trends, noting, “Last year, the world added 460 gigawatts of new non-hydro renewables, while nuclear energy generation declined by one gigawatt. The transition to renewable energy is happening globally because it benefits both the environment and economies.”

Bowen remarked, “We’ve done what the previous government couldn’t deliver—introducing safeguards, legislating vehicle emissions standards, and more.”

Government to Unveil Climate Projections This Week

Prime Minister Albanese and Energy Minister Bowen also announced the government would release its annual climate change statement later this week.

“The Climate Change Authority’s annual progress report will make clear, together with the government’s projections, that we are on track to meet our targets,” said Bowen.

The report will also provide updates on emissions reductions and the impact of the Safeguard Mechanism, which targets top polluters.