Australians Are Paying the Price for Outdated Electricity Rules: Report

Current rules no longer protect households from price shocks, according to the review.
Australians Are Paying the Price for Outdated Electricity Rules: Report
Federal Energy Minister Chris Bowen speaks to the media during a press conference at Parliament House in Canberra, Australia on June 30, 2025. AAP Image/Lukas Coch
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Outdated electricity market rules are making Australia’s power system more volatile and costly, a new review has warned—and households are footing the bill.

The National Electricity Market wholesale market settings review, released on Aug. 6, has urged the federal government to overhaul the current “energy-only” market, where power generators are paid only for what they supply.

It says this system no longer provides strong or reliable price signals.

The report suggests electricity price limits should reflect what customers are willing to pay to maintain a reliable supply. It also recommends tighter rules to stop companies from using software or last-minute price changes to game the system and inflate costs.

It also calls for the Reliability Panel to review how market price settings are determined, to ensure they reflect the value consumers place on avoiding blackouts while still providing enough income for energy suppliers to stay in the market.

These settings include the maximum and minimum allowable prices, and trigger mechanisms that kick in if high prices persist for too long.

Additional recommendations include publishing battery charge data from 2025 and extending electricity supply forecasts from three to five years to give investors greater certainty.

A new “Electricity Services Entry Mechanism” scheme is also being proposed to encourage investment in clean energy and backup power that helps keep the electricity supply stable.

Batteries, Storage Must Join Grid by 2030

The review argues that stronger integration of household batteries, community storage, and virtual power plants into the dispatch system by 2030 is essential.

Without this, the system remains “blind” to a large pool of flexible energy capacity, leaving homes vulnerable to sudden price spikes and reliance on expensive backup generators.

Other recommendations call for better transparency, tighter bidding rules, and longer-term market forecasts.