The Federal Government has initiated a comprehensive review of Australia’s National Electricity Market (NEM) to ensure it remains fit for purpose.
The review aims to manage the integration of rooftop solar and utility-scale renewables while keeping electricity costs affordable for households and businesses.
“The review will provide a comprehensive assessment of what the market will need next, once the current CIS tenders end in 2027, to ensure that investment pipeline remains strong,” Chris brown, Minister for Energy said.
“During its decade of delay and denial, the Coalition made no attempt to address the foreshadowed closure of 90 per cent of Australia’s coal fleet. They continue to ignore reality in calling for these increasingly unreliable generators to be kept open longer than planned, as their only solution to meet Australia’s growing energy needs for the next 15 years or more.
“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.”
An independent expert panel, chaired by Associate Professor Tim Nelson and including Paula Conboy, Ava Hancock, and Philip Hirschhorn, will oversee the review.
The panel is expected to deliver final recommendations to Energy and Climate Ministers by late 2025, following extensive consultations.
Central to the review is an examination of NEM’s wholesale market settings to encourage investment in firmed renewable energy and storage.
According to the government, this is critical as electricity demand increases and ageing coal-fired power stations are phased out.
The NEM, one of the world’s largest interconnected electricity networks, spans over 40,000km of transmission lines and serves more than 23 million Australians.
Initially designed to support a coal-dominated base load power grid, the system now requires significant updates to meet growing electricity demand and support the transition to cleaner energy.
In response to this shift, the government introduced the Capacity Investment Scheme (CIS) to accelerate investments in renewable energy and storage.
By 2030, CIS is expected to add nearly 50 per cent more capacity in clean and reliable energy to the current NEM.
The terms of reference for the review, developed in consultation with state and territory governments, can be found on the Department of Climate Change, Energy, the Environment, and Water (DCCEEW) website.
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