Avoiding gridlock: Policy directions for Australia’s electricity system

Australia’s national energy landscape has been transformed since the creation of the National Electricity Market two decades ago.

The rapid uptake of renewable technology and leaps forward in energy efficiency and storage have been game changers for generators, distributors, retailers and consumers of electricity. If harnessed effectively, these changes can move us closer to the sustainable energy system we need to power a decarbonised Australian economy in the 21st century. But this will only happen if the way we regulate electricity markets keeps pace. This paper argues that an updated approach to regulation of energy distribution networks is especially vital.

Retail prices for electricity have nearly doubled since 2007. This has increased the cost of living, disproportionately impacting poorer households. It has also increased the cost of doing business for companies, harming the competitiveness and productivity of the Australian economy. The greatest source of this increase in prices has been higher network charges for the construction and maintenance of distribution assets - the poles, wires and other ‘grid’ infrastructure that sit between the large-scale producers of energy (generators) and the companies that connect houses and businesses (retailers).

Read the report: “Avoiding gridlock: Policy directions for Australia’s electricity system.”