Energy market review must deliver a “new deal” for consumers

The Australian government’s decision to review the National Electricity Market (NEM) presents a pivotal opportunity to transform the nation’s energy system and deliver cost of living relief. 

With consumers poised to lead the charge in electrification, this review must deliver a “new deal” that places households at the heart of Australia’s energy transition.

Australia is entering a new energy era where the scale of investment by everyday Australians dwarfs that of institutional players. Over the next 20 years, households will collectively outspend large energy companies by up to eight times, investing in solar panels, batteries, electric vehicles, and efficient electric appliances.

Yet, the current system overwhelmingly prioritises big energy companies, leaving consumers – who are the most reliable and consistent investors in clean energy – at a disadvantage.

This imbalance demands urgent reform. This is not just a matter of fairness; it is critical to the success of Australia’s energy transition. The fastest way to bring down cost of living for households and national emissions is to press the pedal on electrification.

Instead of waiting years and decades for a handful of billion-dollar projects, tens of thousands of electricians can rewire hundreds of thousands of households. This is lower risk and faster than waiting on boondoggles like Snowy 2.0. 

The problems plaguing our current energy system are well-documented. Reliance on aging, unreliable coal-fired power plants has led to supply shortfalls and price volatility.

Consumers bear the brunt of these inefficiencies, yet their contributions – solar-powered homes, electric vehicles, and residential batteries – remain underutilised in the energy market.

The government’s review, long advocated for by groups like Rewiring Australia, must redesign the market to embrace electrification and empower consumers. The policy shift should include mechanisms to ensure solar households and other “prosumer” contributors are rewarded for their investments. It must also address price gouging and support infrastructure upgrades to accommodate the clean energy boom driven by households.

Critically, the independent panel conducting the review must engage directly with those at the forefront of the energy revolution: households with solar, electricians installing these systems, and small businesses innovating in clean technology. Their insights are invaluable in crafting a consumer-centric energy market that aligns with the scale of their investment.

The stakes are high. Australia’s energy market risks falling behind the rapid pace of consumer electrification unless it undergoes a comprehensive overhaul.

The review represents a chance to reset the system, prioritise affordability and reliability, and ensure that the economic and environmental benefits of clean energy flow to those who are funding it – ordinary Australians.

This is a moment for visionary leadership. If done right, the NEM review could set a global benchmark for consumer-focused energy policy, harnessing the collective power of millions of households to deliver a cleaner, fairer, and more reliable energy future.

Failure to act decisively, however, risks squandering this unprecedented wave of consumer investment.

The government must seize this opportunity to deliver a new energy deal – one that recognises and rewards the pivotal role of Australian households in powering the nation’s energy transition.

Dan Cass is executive director and co-founder of Rewiring Australia