More than a decade and a half of bipartisan reform of our electricity markets has delivered secure, reliable and competitively priced electricity to millions of Australians.
The next decade will see continued pressure on prices, a less certain demand outlook and changes in the way we generate and use energy as we transition to a clean energy future.
While many underlying cost drivers will remain, the Australian Government is committed to delivering reforms that will help keep price rises to those that are absolutely necessary and to ensuring that markets are delivering efficient services to consumers.
The Standing Council on Energy and Resources has a work program targeted at improving key aspects of network regulation, developing a more effective demand-side framework, improving network planning and connection (including for distributed generation), and strengthening important consumer frameworks. There is a need to ensure timely implementation before the next round of regulatory decisions.
There is a need to complete unfinished market reforms, which can deliver significant additional benefits for electricity consumers, including:
implementing commitments to retail price deregulation where effective competition exists (where it does not, governments should commit to a transitional program to promote competition and move to regulated pricing structures that reflect competitive outcomes)
promoting greater efficiency and transparency in publicly owned energy businesses through improved corporate governance and accountability
extending governance arrangements and principles to all electricity markets through a more national application of energy laws and by ensuring that energy institutions have sufficient capacity, capability and accountability to carry out their functions
improving mechanisms to support consumer participation in markets and market processes.
A long-term transformation is now underway in our electricity sector. It includes the replacement of ageing infrastructure, the integration of new cleaner generation and smart energy management technologies, and a greater consumer influence on market outcomes.
Consumers have faced substantial electricity cost increases in recent times, in some cases well over 50% in the past four years, to support record levels of investment in infrastructure needed to meet growing levels of demand and supply reliability, sometimes with little sense of the benefits that this service provides.
There is a need to improve confidence in our markets and take action to stimulate greater competition and business innovation and to ensure that markets are operating in the long-term interests of consumers. Better communication is also needed on the reasons for price increases. Consumers, through their energy choices, also have an important role to play in reducing costs.
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